Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 26, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Seven Stars Cloud Group, Inc. | ||
Entity Central Index Key | 837,852 | ||
Trading Symbol | ssc | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Common Stock, Shares Outstanding | 68,865,056 | ||
Entity Public Float | $ 63,222,176 | ||
Document Type | 10-K/A | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | true | ||
Amendment Description | EXPLANATORY NOTE Seven Stars Cloud Group, Inc. is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “Original Filing”), which was originally filed with the Securities and Exchange Commission on March 30, 2018. The purpose of this amendment is to amend certain Items of our Form 10-K for the fiscal year ended December 31, 2017 in response to comments received from the Securities and Exchange Commission. This Amendment does not include the entire Form 10-K. Except for those Items of the Form 10-K contained herein, this Amendment does not amend any information set forth in the Original Filing, and the Company is not required to update disclosures to reflect any events that occurred subsequent to March 30, 2018. | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | ||
Current assets: | ||||
Cash | $ 7,205,096 | $ 3,761,814 | [1] | |
Accounts receivable, net | 26,962,085 | 9,522,151 | [1] | |
Licensed content, current | 16,958,149 | 124,319 | [1] | |
Notes receivable | [1] | 1,749,830 | ||
Inventory | 216,453 | 203,697 | [1] | |
Prepaid expenses | 2,202,728 | 375,944 | [1] | |
Other current assets | 2,256,727 | 3,581,822 | [1] | |
Total current assets | 55,801,238 | 19,319,577 | [1] | |
Property and equipment, net | 113,993 | 4,963,725 | [1] | |
Licensed content, non-current | [1] | 17,593,528 | ||
Intangible assets, net | 148,874 | 453,242 | [1] | |
Goodwill | [1] | 6,648,911 | ||
Long-term investments | 6,975,511 | 6,654,664 | [1] | |
Other non-current assets | [1] | 112,643 | ||
Total assets | 63,039,616 | 55,746,290 | [1] | |
Current liabilities: (including amounts of consolidated VIEs without recourse to Seven Stars Cloud Group, Inc. See note 4) | ||||
Accounts payable | 26,829,593 | 13,341,680 | [1] | |
Advance from customers | 222,350 | 1,350,054 | [1] | |
Accrued interest due to a related party | 20,055 | 557,918 | [1] | |
Accrued other expenses | 174,358 | 708,987 | [1] | |
Accrued salaries | 737,072 | 766,957 | [1] | |
Payable for purchase of building | [1] | 987,015 | ||
Amount due to related parties | 45,639 | 1,060,817 | [1] | |
Other current liabilities | 625,942 | 934,480 | [1] | |
Accrued license content fees | [1] | 1,236,661 | ||
Convertible promissory note due to a related party | 3,000,000 | 3,000,000 | [1] | |
Warrant liabilities | [1] | 70,785 | ||
Total current liabilities | 31,655,009 | 24,015,354 | [1] | |
Total liabilities | 31,655,009 | 24,015,354 | [1] | |
Commitments and contingencies: (Note 18) | [1] | |||
Convertible redeemable preferred stock: | ||||
Series A - 7,000,000 shares issued and outstanding, liquidation and deemed liquidation preference of $3,500,000 as of December 31, 2017 and 2016, respectively | 1,261,995 | 1,261,995 | [1] | |
Equity: | ||||
Series E Preferred Stock - $0.001 par value; 16,500,000 shares authorized, nil and 7,154,997 shares issued and outstanding, liquidation preference of nil and $12,521,245 as of December 31, 2017 and December 31, 2016, respectively | [1] | 7,155 | ||
Common stock - $0.001 par value; 1,500,000,000 shares authorized, 68,509,090 and 53,918,523 shares issued and outstanding as of December 31, 2017 and 2016, respectively | 68,509 | 53,918 | [1] | |
Additional paid-in capital | 157,968,548 | 152,755,919 | [1] | |
Accumulated deficit | (125,865,391) | (115,669,268) | [1] | |
Accumulated other comprehensive loss | (759,687) | (1,353,302) | [1] | |
Total Seven Stars Cloud shareholder's equity | 31,411,979 | 35,794,422 | [1] | |
Non-controlling interest | (1,289,367) | (5,325,481) | [1] | |
Total equity | 30,122,612 | 30,468,941 | [1] | |
Total liabilities, convertible redeemable preferred stock and equity | $ 63,039,616 | $ 55,746,290 | [1] | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | ||
Statement of Financial Position [Abstract] | ||||
Convertible redeemable preferred stock, Series A shares issued | 7,000,000 | 7,000,000 | [1] | |
Convertible redeemable preferred stock, Series A shares outstanding | 7,000,000 | 7,000,000 | [1] | |
Convertible redeemable preferred stock, Series A liquidation and deemed liquidation preference | $ 3,500,000 | $ 3,500,000 | [1] | |
Series E Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | [1] | |
Series E Preferred Stock, shares authorized | 16,500,000 | 16,500,000 | [1] | |
Series E Preferred Stock, shares issued | [1] | 7,154,997 | ||
Series E Preferred Stock, shares outstanding | [1] | 7,154,997 | ||
Series E Preferred Stock, liquidation preference | [1] | $ 12,521,245 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | [1] | |
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 | [1] | |
Common stock, shares issued | 68,509,090 | 53,918,523 | [1] | |
Common stock, shares outstanding | 68,509,090 | 53,918,523 | [1] | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Income Statement [Abstract] | ||||
Revenue from third parties | $ 125,365,751 | $ 35,185,508 | [1] | |
Revenue from related party | [2] | 18,973,054 | [1] | |
Total revenue | 144,338,805 | 35,185,508 | ||
Cost of revenue | 137,188,353 | 35,551,198 | [1] | |
Gross profit | 7,150,452 | (365,690) | [1] | |
Operating expenses: | ||||
Selling, general and administrative expenses | 12,848,184 | 10,898,323 | [1] | |
Research and development expense | 406,845 | |||
Professional fees | 3,153,697 | 1,400,139 | [1] | |
Depreciation and amortization | 306,801 | 505,028 | ||
Impairment of other intangible assets (Note 8) | 216,468 | 2,018,628 | [1] | |
Earn-out share award expense (Note 13) | [1] | 13,700,000 | ||
Total operating expenses | 16,931,995 | 28,522,118 | [1] | |
Loss from operations | (9,781,543) | (28,887,808) | [1] | |
Interest and other income (expense): | ||||
Interest expense, net | (95,658) | (254,725) | [1] | |
Change in fair value of warrant liabilities | (112,642) | 324,432 | [1] | |
Equity in loss of equity method investees | (129,193) | (31,557) | [1] | |
Impairment of equity method investments | [1] | (38,448) | ||
Others | (73,833) | 57,017 | [1] | |
Loss before income taxes and non-controlling interest | (10,192,869) | (28,831,089) | [1] | |
Income tax benefit | [1] | 330,124 | ||
Net loss | (10,192,869) | (28,500,965) | [1] | |
Net loss attributable to non-controlling interest | 357,268 | 2,092,991 | [1] | |
Net loss attributable to Seven Stars Cloud shareholders | $ (9,835,601) | $ (26,407,974) | [1] | |
Basic and diluted loss per share (in dollars per share) | $ (0.16) | $ (0.73) | [1] | |
Weighted average shares outstanding: | ||||
Basic and diluted (in shares) | 61,182,209 | 35,998,001 | [1] | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") | |||
[2] | Crude Oil Trading In December, 2017, One of our crude oil transaction was sold to one entity of which our minority shareholder has significant influence upon. Even though the crude oil was eventually sold to independent third party, the Company has recorded this sale as one separate related party sale in its financial statement. As of December 31, 2017, invoice related to this transaction has been collected as payment term of this transaction is pre-payment for full invoice value on pre-payment due date one or two business days before the notice of readiness tendered. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | [1] | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (10,192,869) | $ (28,500,965) | |
Other comprehensive loss, net of nil tax | |||
Foreign currency translation adjustments | 770,261 | (928,776) | |
Comprehensive loss | (9,422,608) | (29,429,741) | |
Comprehensive loss attributable to non-controlling interest | 401,359 | 2,051,010 | |
Comprehensive loss attributable to Seven Stars Cloud shareholders | $ (9,021,249) | $ (27,378,731) | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Series E Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Seven Stars Cloud Shareholders' Equity | Non- controlling Interest | Total | ||
Balance at Dec. 31, 2015 | $ 7,255 | $ 24,249 | $ 97,512,542 | $ (86,457,840) | $ (414,910) | $ 10,671,296 | $ (2,388,031) | $ 8,283,265 | ||
Balance (in shares) at Dec. 31, 2015 | 7,254,997 | 24,249,109 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | $ 25 | 319,693 | 319,718 | 319,718 | ||||||
Share-based compensation (in shares) | 25,000 | |||||||||
Common stock issuance | $ 5,681 | 9,994,319 | 10,000,000 | 10,000,000 | ||||||
Common stock issuance (in shares) | 5,681,819 | |||||||||
Common stock issued to SSS | $ 4,545 | 9,270,665 | 9,275,210 | 9,275,210 | ||||||
Common stock issued to SSS (in shares) | 4,545,455 | |||||||||
Warrants issued to SSS | 724,790 | 724,790 | 724,790 | |||||||
Issuance cost in connection with the issuance of common stock and warrant to SSS | (411,223) | (411,223) | (411,223) | |||||||
Earn-out shares issued to SSS | $ 10,000 | 13,690,000 | 13,700,000 | 13,700,000 | ||||||
Earn-out shares issued to SSS (in shares) | 10,000,000 | |||||||||
Common stock issued from conversion of convertible note | $ 9,209 | 17,724,088 | 17,733,297 | 17,733,297 | [1] | |||||
Common stock issued from conversion of convertible note (in shares) | 9,208,860 | |||||||||
Restricted shares granted in connection with acquisition of intangible assets | $ 67 | 121,628 | 121,695 | 121,695 | ||||||
Restricted shares granted in connection with acquisition of intangible assets (in shares) | 66,500 | |||||||||
Common stock issued for settlement of liability | $ 42 | 74,958 | 75,000 | 75,000 | ||||||
Common stock issued for settlement of liability (in shares) | 41,780 | |||||||||
Common stock issued from conversion of series E preferred stock | $ (100) | $ 100 | ||||||||
Common stock issued from conversion of series E preferred stock (in shares) | (100,000) | 100,000 | ||||||||
Acquisition of MYP and WAG | 3,734,459 | (2,803,454) | 32,365 | 963,370 | (886,440) | 76,930 | ||||
Net loss | (26,407,974) | (26,407,974) | (2,092,991) | (28,500,965) | [1] | |||||
Foreign currency translation adjustments, net of nil tax | (970,757) | (970,757) | 41,981 | (928,776) | [1] | |||||
Balance at Dec. 31, 2016 | [1] | $ 7,155 | $ 53,918 | 152,755,919 | (115,669,268) | (1,353,302) | 35,794,422 | (5,325,481) | 30,468,941 | |
Balance (in shares) at Dec. 31, 2016 | [1] | 7,154,997 | 53,918,523 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 1,305,829 | 1,305,829 | 1,305,829 | |||||||
Common stock issuance | $ 6,222 | 11,969,368 | 11,975,590 | 11,975,590 | ||||||
Common stock issuance (in shares) | 6,221,778 | |||||||||
Common stock issuance for RSU vested | $ 118 | (118) | ||||||||
Common stock issuance for RSU vested (in shares) | 117,715 | |||||||||
Common stock issuance for option exercised | $ 189 | 100,129 | 100,318 | 100,318 | ||||||
Common stock issuance for option exercised (in shares) | 188,687 | |||||||||
Common stock issued for warrant exercised | $ 907 | 1,724,819 | 1,725,726 | 1,725,726 | ||||||
Common stock issued for warrant exercised (in shares) | 907,390 | |||||||||
Common stock issued from conversion of series E preferred stock | $ (7,155) | $ 7,155 | ||||||||
Common stock issued from conversion of series E preferred stock (in shares) | (7,154,997) | 7,154,997 | ||||||||
Disposal of one subsidiary | (9,887,398) | (360,522) | (220,737) | (10,468,657) | 3,947,473 | (6,521,184) | ||||
Capital contribution from noncontrolling interest shareholder | 490,000 | 490,000 | ||||||||
Net loss | (9,835,601) | (9,835,601) | (357,268) | (10,192,869) | ||||||
Foreign currency translation adjustments, net of nil tax | 814,352 | 814,352 | (44,091) | 770,261 | ||||||
Balance at Dec. 31, 2017 | $ 68,509 | $ 157,968,548 | $ (125,865,391) | $ (759,687) | $ 31,411,979 | $ (1,289,367) | $ 30,122,612 | |||
Balance (in shares) at Dec. 31, 2017 | 68,509,090 | |||||||||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Cash flows from operating activities: | ||||
Net loss | $ (10,192,869) | $ (28,500,965) | [1] | |
Adjustments to reconcile net loss to net cash used in operating activities | ||||
Share-based compensation expense | 1,305,829 | 319,718 | [1] | |
Provision for doubtful accounts | 145,512 | 2,825,124 | [1] | |
Depreciation and amortization | 306,801 | 505,028 | ||
Amortization of debt issuance costs | [1] | 122,696 | ||
Income tax benefit | [1] | (330,124) | ||
Equity in losses of equity method investees | 129,193 | 31,557 | [1] | |
Loss on disposal of assets | 688,098 | |||
Change in fair value of warrant liabilities | 112,642 | (324,432) | [1] | |
Earn-out share award expense | [1] | 13,700,000 | ||
Impairment of other intangible assets | 216,468 | 2,018,628 | [1] | |
Impairment of equity method investments | [1] | 38,448 | ||
Impairment of licensed content | [1] | 496,467 | ||
Foreign currency exchange gain | [1] | (81,666) | ||
Change in assets and liabilities: | ||||
Accounts receivable | (18,802,766) | (4,263,094) | [1] | |
Licensed content | 759,698 | 37,568 | [1] | |
Inventory | [1] | 122,107 | ||
Prepaid expenses and other assets | 3,748,873 | (4,788,796) | [1] | |
Accounts payable | 13,493,865 | 6,960,916 | [1] | |
Accrued expenses, salary and other current liabilities | (759,918) | 10,489 | [1] | |
Deferred revenue | (1,124,119) | 1,294,427 | [1] | |
Accrued license content fees | [1] | 378,964 | ||
Net cash used in operating activities | (9,972,693) | (9,426,940) | [1] | |
Cash flows from investing activities: | ||||
Acquisition of property and equipment | (48,555) | (3,826,697) | [1] | |
Proceeds from disposal of property and equipment | 2,515,923 | |||
Disposal of subsidiaries, net of cash disposed | (8,753) | |||
Cash paid for the acquisition of subsidiaries | (754,361) | |||
Investments in intangible assets | [1] | (2,992,072) | ||
Acquisition of MYP and WAG, net of cash acquired | [1] | 527,217 | ||
Payments for long term investments | (2,250,000) | (3,733,750) | [1] | |
Capital decrease in long term investment | 35,612 | |||
Deposit for investment | [1] | (172,077) | ||
Net cash used in investing activities | (510,134) | (10,197,379) | [1] | |
Cash flows from financing activities | ||||
Proceeds from issuance of shares and warrant (Note 10 and Note 13) | 13,618,207 | 20,000,000 | [1] | |
Repayment of amounts due to related parties | (243,507) | |||
Capital contribution from noncontrolling interest shareholder | 490,000 | |||
Cost associated with financing activities | [1] | (294,890) | ||
Net cash provided by financing activities | 13,864,700 | 19,705,110 | [1] | |
Effect of exchange rate changes on cash | 61,409 | (87,874) | [1] | |
Net increase (decrease) in cash | 3,443,282 | (7,083) | [1] | |
Cash at the beginning of the year | [1] | 3,761,814 | 3,768,897 | |
Cash at the end of the year | 7,205,096 | 3,761,814 | [1] | |
Supplemental disclosure of cash flow information: | ||||
Exchange of Series E Preferred Stock for Common stock | $ 7,155 | 100 | [1] | |
Issuance of convertible note for licensed content (Note 13) | [1] | 17,717,847 | ||
Issuance of shares for the settlement of liability | [1] | 75,000 | ||
Issuance of shares upon conversion of convertible note, including accrued interest and debt issuance cost (Note 13) | [1] | 17,733,297 | ||
Issuance of earn-out shares (Note 13) | [1] | 13,700,000 | ||
Acquisition of long term investment through transfer of Game IP rights (Note 12) | [1] | 2,714,441 | ||
Workforce intangible acquired for shares (Note 8) | [1] | 121,695 | ||
Payable for purchase of building | [1] | $ 987,015 | ||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Dec. 31, 2017 | |
Organization And Principal Activities [Abstract] | |
Organization and Principal Activities | 1. Organization and Principal Activities Seven Stars Cloud Group, Inc. (the “Company”), formerly known as Wecast Network, Inc., is a Nevada corporation that primarily operates in China (“PRC”) through its subsidiaries and consolidated variable interest entities (“VIEs”). The Company, its subsidiaries and consolidated VIEs are collectively referred to as Seven Stars Cloud (“SSC”, “we”, “us”, or “the Company”). SSC is aiming to become a digital financial services company with seven products engines which are financial technologies based. Through acquisitions made in 2017 and establishment of joint ventures, engine seven “Supply Chain Finance and Management for Vertical Products” is in operation. SSC is also leveraging its legacy operations as a premium content Video On Demand (“VOD”) service provider in China. On January 30, 2017, the Company entered into a Securities Purchase Agreement (the “Sun Video SPA”) with BT Capital Global Limited, a British Virgin Islands company (“BT”) and affiliate of the Company’s Chairman Bruno Wu, for the purchase by the Company of all of the outstanding capital stock of Sun Video Group Hong Kong Limited (“Wecast Services”). On January 31, 2017, the Company entered into another Securities Purchase Agreement (the “Wide Angle SPA”) with BT and Sun Seven Stars Media Group Limited, one of the Company’s largest shareholders, controlled by Mr. Wu, as guarantor, for the purchase by us of 55% of the outstanding capital stock of Wide Angle Group Limited (“Wide Angle”). Details of these two acquisitions are in Note 5. After acquiring these two entities, other than Company’s legacy You On Demand (“YOD”) business, the Company became engaged in consumer electronics e-commerce and smart supply chain management operations. In 2017, the Company entered into another Securities Purchase Agreement (the “BT SPA”) with BT, pursuant to which the issued and outstanding stock that SSC holds in one loss-generating non-core assets was sold to BT for zero. The detail of this transaction has been disclosed in Note 12. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies (a) Principles of Consolidation The consolidated financial statements include the financial statements of Seven Stars Cloud Group, Inc., its wholly-owned subsidiaries, its VIEs in which the Company is the primary beneficiary, and the subsidiary of its consolidated VIE. All material intercompany transactions and balances are eliminated upon consolidation. (b) Basis of Presentation The Company prepares and presents its consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s consolidated financial statements as of December 31, 2016 have been prepared as if the Wecast Services and Wide Angle had been owned by the Company since November 10, 2016 presented and the Company’s consolidated financial statements as of December 31, 2016 has been retrospectively adjusted accordingly. (c) Long term investments Equity method investment Investments in entities where the Company can exercise significant influence, but not control, are accounted for using the equity method. Under the equity method, the investment is initially recorded at cost and adjusted for the Company’s share of undistributed earnings or losses of the investee. The Company’s share of losses is not recognized when the investment is reduced to zero since the Company does not guarantee the investees’ obligations nor is the Company committed to providing additional funding. Management evaluates impairment on the investments accounted for under the equity method of accounting based on performance and the financial position of the investee, as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financings, projected and historical financial performance, cash flow forecasts and financing needs. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and the impairment is determined to be other-than-temporary. Cost method investment Investment in entities over which the Company neither has significant influence nor control are accounted for using under the cost method. Under the cost method, the Company records the investment at cost and recognizes income for any dividends declared from distribution of investee’s earnings. The Company reviews the cost method investments for impairment whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable. We impair our cost method investment when we determine that there has been an “other-than temporary” decline in the investments fair value compared to its carrying value. The fair value of the investment would then become the new cost basis of the investment. There were no indicators of impairment in 2017. (d) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities, at the date of the consolidated financial statements and during the reporting period. Actual results could differ from those estimates. The significant estimates include, but not limited to, the determination of estimated selling prices of multiple elements revenues contract, the expected revenue from licensed content, allowances for doubtful accounts, share-based compensation and equity based transactions with non-employees, determination of the estimated useful lives of intangible assets, impairment assessment of goodwill, intangible assets, and licensed content, determination of the fair value of financial instruments and valuation of deferred income taxes assets. These estimates may be adjusted as more current information becomes available, and any adjustment made could be significant. (e) Foreign Currency Translation The Company uses the United States dollar (“$” or “USD”) as its reporting currency. The functional currency of Seven Stars Cloud Group, Inc., CB Cayman, YOD Hong Kong, M.Y. Products LLC, Amer and Seven Stars Energy is the USD while the functional currency of other subsidiaries and VIEs is either the Renminbi (“RMB”) or Hong Kong dollars (“HKD”). In the consolidated financial statements, the financial information of the entities which use RMB and HKD as their functional currency has been translated into USD. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at the historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component of other comprehensive loss in the statement of comprehensive loss. Transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated in the functional currency at the applicable rates of exchange in effect at the balance sheet date. The resulting exchange differences are recorded in the consolidated statements of operations. (f) Cash Cash consist of cash on hand and demand deposit as of the date of purchase of three months or less. The Company deposits its cash balances with a limited number of banks. (g) Accounts Receivable, net Accounts receivable are recognized at invoiced amounts and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews its allowance for doubtful accounts receivable on an ongoing basis. In establishing the required allowance, management considers any historical losses, the customer’s financial condition, the accounts receivable aging, and the customer’s payment patterns. After all attempts to collect a receivable have failed and the potential for recovery is remote, the receivable is written off against the allowance. (h) Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Expenditures for major renewals and improvements, which extend the original estimated economic useful lives of applicable assets, are capitalized. Expenditures for normal repairs and maintenance are charged to expense as incurred. The costs and related accumulated depreciation of assets sold or retired are removed from the accounts and any gain or loss thereon is recognized in the consolidated statement of operations. Depreciation is provided for on a straight-line basis over the estimated useful lives of the respective assets. The estimated useful life is 5 years for the furniture, 3 years for the electronic equipment, 5 to 10 years for the vehicles, 20 years for the office building and lesser of lease terms or the estimated useful lives of the assets for the leasehold improvements. (i) Licensed Content The Company obtains content through content license agreements with studios and distributors. We recognize licensed content when the license fee and the specified content titles are known or reasonably determinable. Prepaid license fees are classified as an asset on the consolidated balance sheets as licensed content and accrued license fees payable are classified as a liability on the consolidated balance sheets. We amortize licensed content in cost of revenues over the contents contractual availability based on the expected revenue derived from the licensed content, beginning with the month of first availability, such that our revenues bear a representative amount of the cost of the licensed content. We review factors that impact the amortization of licensed content at each reporting date, including factors that may bear direct impact on expected revenue from specific content titles. Changes in our expected revenue from licensed content could have a significant impact on our amortization pattern. Management evaluates the recoverability of the licensed content whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. For the years ended December 31, 2017 and 2016, an impairment loss of nil and $496,467 was recognized in cost of revenue, respectively. (j) Intangible Assets and Goodwill Company accounts for intangible assets and goodwill, in accordance with ASC 350, Intangibles – Goodwill and Other. ASC 350 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be evaluated for impairment at least annually. ASC 350 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives and reviewed for impairment whenever events indicate the carrying amount may not be recoverable. In accordance with ASC 350, goodwill is allocated to reporting units, which are either the operating segment or one reporting level below the operating segment. On an annual basis, we review goodwill for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances makes it more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If we determine that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, goodwill is further tested for impairment by comparing the carrying value to the estimated fair value of its reporting units, determined using externally quoted prices (if available) or a discounted cash flow model and, when deemed necessary, a market approach. Application of goodwill impairment tests requires significant management judgment, including the identification of reporting units, assigning assets, liabilities and goodwill to reporting units and determination of fair value of each reporting unit. Judgment applied when performing the qualitative analysis includes consideration of macroeconomic, industry and market conditions, overall financial performance of the reporting unit, composition, personnel or strategy changes affecting the reporting unit and recoverability of asset groups within a reporting unit. Judgments applied when performing the quantitative analysis includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these judgments, estimates and assumptions could materially affect the determination of fair value for each reporting unit. (k) Warrant Liabilities We account for derivative instruments and embedded derivative instruments in accordance with ASC 815, Accounting for Derivative Instruments and Hedging Activities We also follow ASC 815-40 Contracts in Entity’s Own Equity (l) Revenue Recognition When persuasive evidence of an arrangement exists, the sales price is fixed or determinable and collectability is reasonably assured, we recognize revenue as services are performed. For certain contracts that involve sub-licensing content within the specified license period, revenue is recognized in accordance with ASC Subtopic 926-605, Entertainment-Films - Revenue Recognition, whereby revenue is recognized upon delivery of films when the arrangement includes a nonrefundable minimum guarantee, delivery is complete and we have no substantive future obligations to provide future additional services. Payments received from customers for the performance of future services are recognized as deferred revenue, and subsequently recognized as revenue in the period that the service obligations are completed. In accordance with ASC 605-25, Revenue Recognition - Multiple Element Arrangements, contracts with multiple element deliverables are separated into individual units for accounting purposes when the unit determined to have standalone value to the customer. Since the contract price is for all deliverables, company allocated the arrangement consideration to all deliverables at the inception of the arrangement based on their relative selling price. Company uses (a) vendor-specific objective evidence of selling price, if it exists, or, (b) the management’s best estimate of the selling price for that deliverable to determine the relative selling price of each individual unit. Company also generates revenue from sales of goods. Sales orders are confirmed after negotiation on price between customers and us. Purchase orders are confirmed after careful selection of suppliers and negotiation on price. Company purchases finished goods from suppliers in accordance with sales orders from customers. Our suppliers then deliver goods to our customers directly. Company is required to bear the direct risk of damage to the goods that the direct default risk that cannot be delivered to the customer. When the delivery is completed, company recognizes revenue and the related cost at the same time. According to purchase orders with suppliers, company, as the owner of the goods, becomes the first responsible party for the goods. Revenue arrangements for consumer electronics is as follows: the Company signs a sales order with customers which designates the Company as principal to purchase and deliver goods to designated locations in Hong Kong. When the delivery is completed, the performance obligation is fulfilled. The price of each transaction is fixed to the sales order, and no variable consideration nor any consideration payable to the client or customer exists. The Company also has developed a TPaaS (Platform as a Service) system which went into operation in Q4 2017, however, no revenue was recognized in connection with this platform during Q4 2017. Within this platform, all industrial participants can place orders and complete transactions on their own, which allows customers to minimize transaction costs. The Company earns platform service fees through these automated transactions. In accordance with ASC 605-45, Revenue Recognition – Principal Agent Consideration, company accounts for revenue from sales of goods on a gross basis. Company is the primary obligor in the arrangements, as company has the ability to establish prices, and has discretion in selecting the independent suppliers and other third-party that will perform the delivery service, company is responsible for the defective products and company bears credit risk with customer payments. Accordingly, all such revenue billed to customers is classified as revenue and all corresponding payments to suppliers are classified as cost of revenues. The recognition of revenue involves certain judgments and changes in our assumptions, judgments or estimations may have a material impact on the amount and timing of our revenue recognition. (m) Share-Based Compensation The Company awards share options and other equity-based instruments to its employees, directors and consultants (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. The Company recognizes the compensation cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The amount of cost recognized is adjusted to reflect the expected forfeiture prior to vesting. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. The Company also awards stocks and warrants for service to consultants for service and accounts for these awards under ASC 505-50, Equity - Equity-Based Payments to Non-Employees (n) Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Deferred taxes are recognized for the future tax consequences attributable to temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and income tax purposes using enacted rates expected to be in effect when such amounts are realized or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established, as needed to reduce the amount of deferred tax assets if it is considered more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. There were no such interest or penalty for the years ended December 31, 2017 and 2016. On December 22, 2017 the U.S. Tax Reform, which among other effects, reduces the U.S. federal corporate income tax rate to 21% from 34% (or 35% in certain cases) beginning in 2018, requires companies to pay a one-time transition tax on certain unrepatriated earnings from non-U.S. subsidiaries that is payable over eight years, makes the receipt of future non-U.S. sourced income of non-U.S. subsidiaries tax-free to U.S. companies and creates a new minimum tax on the earnings of non-U.S. subsidiaries relating to the parent’s deductions for payments to the subsidiaries. Our provisional estimate is that no tax will be due under this provision. We continue to gather information relating to this estimate. (o) Net Loss Per Share Attributable to Seven Stars Cloud Shareholders Net loss per share attributable to Seven Stars Cloud shareholders is computed in accordance with ASC 260, Earnings per Share. The two-class method is used for computing earnings per share. Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s convertible redeemable preferred shares are participating securities because the holders are entitled to receive dividends or distributions on an as converted basis. For the years presented herein, the computation of basic loss per share using the two-class method is not applicable as the Group is in a net loss position and net loss is not allocated to other participating securities, since these securities are not obligated to share the losses in accordance with the contractual terms. Basic net loss per share is computed using the weighted average number of ordinary shares outstanding during the period. Options and warrants are not considered outstanding in computation of basic earnings per share. Diluted net loss per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under treasury stock method. Potential ordinary shares include options and warrants to purchase ordinary shares, preferred shares and convertible promissory note, unless they were anti-dilutive. The computation of diluted net loss per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net loss per share. (p) Reportable Segment The Company’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 Company. In fiscal year 2016, the Company operated and reported its performance in one segment. However, starting from fiscal year 2017, since Company has acquired Wecast Services Limited and Wide Angle Group Limited in January (see note 5), the Company has operated two segments based on different clouds that major business resides in, including Legacy YOD segment and Wecast Service segment. Therefore, there are two reportable segments for the year ended December 31, 2017. The two reportable segments are: Legacy YOD - Provides premium content and integrated value-added service solutions for the delivery of VOD and paid video programming to digital cable providers, Internet Protocol Television (“IPTV”) providers. The core revenues are being generated from both minimum guarantee payments and revenue sharing arrangements with distribution partners as well as subscription or transactional fees from subscribers. Wecast Service - Wecast Services (which resides under the Product Sales Cloud) is currently primarily engaged with consumer electronics e-commerce, smart supply chain management operations and oil trading primarily operated in Singapore. (q) Standards Issued and Not Yet Implemented In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). The new standard is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The standard will require lessees to report most leases as assets and liabilities on the balance sheet, while lessor accounting will remain substantially unchanged. The standard requires a modified retrospective transition approach for existing leases, whereby the new rules will be applied to the earliest year presented. We do not expect the new lease standard to have a material effect on our financial position, results of operations or cash flows. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, or ASU 2014-09, a standard that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer. Extensive disclosures will be required, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances between periods and key judgments and estimates. The FASB has issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (the full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). We currently anticipate adopting the standard using the modified retrospective method. The new standard will be effective for us beginning January 1, 2018. We are undertaking a comprehensive approach to assess the impact of the guidance on our business by reviewing our current accounting policies and practices to identify any potential differences that may result from applying the new requirements to our consolidated financial statements. We do not anticipate that this standard will have a material impact to revenue recognition in both of our legacy YOD business and Wecast Service business. Especially for Wecast Service business, we will continue to recognize revenue as principal for these contracts at the point in time when the products are delivered and performance obligation is fulfilled. The new standard requires to disclose more information about revenue activities and related transactions including quantitative and qualitative information about performance obligations, significant judgements and estimates, contract assets and liabilities and disaggregation of revenue, which we are continuing to assess in the first quarter of 2018. We are also identifying and implementing changes to the Company’s business processes, systems and controls to support adoption of the new standard in 2018. We continue to make significant progress on our review of the standard. Our initial assessment may change as we continue to refine these assumptions. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)”. The pronouncement changes the impairment model for most financial assets, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. We do not expect a material impact to its consolidated financial statement upon adoption of this ASU. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective in the first quarter of 2018 and early adoption is permitted. Management is still evaluating the effect that this guidance will have on the consolidated financial statements and related disclosures. In January 2017, FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The update affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The update is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update provides a more robust framework to use in determining when a set of assets and activities is a business, and also provides more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. For public companies, the update is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The guidance should be applied prospectively upon its effective date. The effect of ASU 2017-01 on the consolidated financial statements will be dependent on any future acquisitions. |
Going Concern and Management's
Going Concern and Management's Plans | 12 Months Ended |
Dec. 31, 2017 | |
Going Concern And Managements Plans [Abstract] | |
Going Concern and Management's Plans | 3. Going Concern and Management’s Plans For the years ended December 31, 2017 and 2016, the Company incurred losses from operations of approximately $9.8 million and $28.9 million, respectively, and incurred net loss of $10.2 million and $28.5 million, respectively, and the Company used cash for operations of approximately $10.0 million and $9.4 million, respectively. Further, the Company had accumulated deficits of approximately $125.9 million and $115.7 million as of December 31, 2017 and 2016, respectively, due to recurring losses since its inception. The Company must continue to rely on proceeds from debt and equity issuances to pay for ongoing operating expenses in order to execute its business plan. On March 28, 2016, the Company completed a common stock financing for $10.0 million. In addition, the Company completed four separate common stock financings with Seven Star Works Co. Ltd. (“SSW”) for $4.0 million on July 19, 2016, with Harvest Alternative Investment Opportunities SPC (“Harvest”) for $4.0 million on August 12, 2016, with Sun Seven Stars Hong Kong Cultural Development Limited (“SSSHK”) for $2.0 million on November 17, 2016 and with certain investors, officers & directors and affiliates in a private placement for $2.0 million on May 19, 2017, respectively. On October 23, 2017, the Company entered into a Securities Purchase Agreement with Hong Kong Guo Yuan Group Capital Holdings Limited. Pursuant to the terms of the agreement, the Company has agreed to sell and issue 5,494,505 shares of the Company’s common stock to the Hong Kong Guo Yuan Group Capital Holdings Limited for $1.82 per share, or a total purchase price of $10.0 million. Although the Company believes it has the ability to raise funds by issuing debt or equity instruments, additional financing may not be available to the Company on terms acceptable to the Company or at all or such resources may not be received in a timely manner. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. |
VIE Structure and Arrangements
VIE Structure and Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Vie Structure And Arrangements [Abstract] | |
VIE Structure and Arrangements | 4. VIE Structure and Arrangements a) Sinotop VIE structure and arrangement To comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provides value-added telecommunication services, the Company provides its services through Sinotop Beijing. The Company has the ability to control Sinotop Beijing through a series of contractual agreements entered into among YOD WFOE, YOD Hong Kong, Sinotop Beijing and the legal shareholders of Sinotop Beijing. Prior to January 2016, the Company entered into a series of contractual agreements to give it the ability to control Sinotop Beijing with Zhang Yan, the former legal shareholder of Sinotop Beijing (the spouse of its then-CEO). In January 2016, in connection with the appointment of a new CEO and in accordance with its rights under the contractual agreements, (1) the legal ownership of Sinotop Beijing was transferred from Zhang Yan to Bing Wu, the brother of its current Chairman and Yun Zhu, the former Vice President of Beijing Sun Seven Stars Culture Development Limited (“SSS”), (2) the Company terminated the series of contractual arrangements with Zhang Yan, and (3) the Company entered into new contractual agreements with Bing Wu and Yun Zhu (collectively, the “Former Sinotop VIE Agreements”). In October 2016, in accordance with its rights under contractual agreements, (1) the legal ownership of Sinotop Beijing was transferred from Bing Wu to Mei Chen, the former CFO of the Company, (2) the Company terminated the series of contractual arrangements with Bing Wu, and (3) the Company entered into new contractual agreements with Mei Chen (collectively, the “New Sinotop VIE Agreements”). Although the Former Sinotop VIE Agreements and New Sinotop VIE Agreements resulted in changes to the legal shareholders of Sinotop Beijing, there was no change in the Company’s ability to control Sinotop Beijing or the Company’s rights to 100% of the economic benefits of Sinotop Beijing. The Company was the primary beneficiary of Sinotop Beijing prior to the signing of the Former Sinotop VIE Agreements and New Sinotop VIE Agreements and the Company remained the primary beneficiary of Sinotop Beijing after the signing of the former Sinotop VIE Agreements and the New Sinotop VIE Agreements. Accordingly, the change in legal ownership of Sinotop Beijing did not have any impact to the Company’s consolidation of Sinotop Beijing. The key terms of the New Sinotop VIE Agreements are summarized as follows: Equity Pledge Agreement Pursuant to the Equity Pledge Agreement among YOD WFOE, Sinotop Beijing, Mei Chen and Yun Zhu (collectively, the “Nominee Shareholders”), the Nominee Shareholders pledged all of their equity interests in Sinotop Beijing (the “Collateral”) to YOD WFOE as security for the performance of the obligations of Sinotop Beijing to make all the required technical service fee payments pursuant to the Technical Services Agreement and for performance of the Nominee Shareholders’ obligation under the Call Option Agreement. The terms of the Equity Pledge Agreement expire upon satisfaction of all obligations under the Technical Services Agreement and Call Option Agreement. Call Option Agreement Pursuant to the Call Option Agreement among YOD WFOE, Sinotop Beijing and the Nominee Shareholders, the Nominee Shareholders granted an exclusive option to YOD WFOE, or its designee, to purchase, at any time and from time to time, to the extent permitted under PRC law, all or any portion of the Nominee Shareholders’ equity in Sinotop Beijing. The exercise price of the option shall be determined by YOD WFOE at its sole discretion, subject to any restrictions imposed by PRC law. The term of the agreement is until all of the equity interest in Sinotop Beijing held by the Nominee Shareholders are transferred to YOD WFOE, or its designee and may not be terminated by any part to the agreement without consent of the other parties. Power of Attorney Pursuant to the Power of Attorney agreements among YOD WFOE, Sinotop Beijing and each of the respective Nominee Shareholders, each of the Nominee Shareholders granted YOD WFOE the irrevocable right, for the maximum period permitted by law, all of its voting rights as shareholders of Sinotop Beijing. The Nominee Shareholders may not transfer any of its equity interest in Sinotop Beijing to any party other than YOD WFOE. The Power of Attorney agreements may not be terminated except until all of the equity in Sinotop Beijing has been transferred to YOD WFOE or its designee. Technical Service Agreement Pursuant to the Technical Service Agreement between YOD WFOE and Sinotop Beijing, YOD WFOE has the exclusive right to provide technical service, marketing and management consulting service, financial support service and human resource support services to Sinotop Beijing, and Sinotop Beijing is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD WFOE. As compensation for providing the services, YOD WFOE is entitled to receive service fees from Sinotop Beijing equivalent to YOD WFOE’s cost plus 30% of such costs as calculated on accounting policies generally accepted in the PRC. YOD WFOE and Sinotop Beijing agree to periodically review the service fee and make adjustments as deemed appropriate. The term of the Technical Services Agreement is perpetual, and may only be terminated upon written consent of both parties. Spousal Consent Pursuant to the Spousal Consent, undersigned by the respective spouse of Nominee Shareholders (collectively, the “Spouses”), the Spouses unconditionally and irrevocably agreed to the execution of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The Spouses agreed to not make any assertions in connection with the equity interest of Sinotop Beijing and to waive consent on further amendment or termination of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The Spouses further pledge to execute all necessary documents and take all necessary actions to ensure appropriate performance under these agreements upon YOD WFOE’s request. In the event the Spouses obtain any equity interests of Sinotop Beijing which are held by the Nominee Shareholders, the Spouses agreed to be bound by the New Sinotop VIE Agreements, including the Technical Services Agreement, and comply with the obligations thereunder, including sign a series of written documents in substantially the same format and content as the New Sinotop VIE Agreements. Letter of Indemnification Pursuant to the Letter of Indemnification among YOD WFOE and Mei Chen and YOD WFOE and Yun Zhu, YOD WFOE agreed to indemnify Nominee Shareholders against any personal, tax or other liabilities incurred in connection with their role in equity transfer to the greatest extent permitted under PRC law. YOD WFOE further waived and released Nominee Shareholders from any claims arising from, or related to, their role as the legal shareholder of Sinotop Beijing, provided that their actions as a nominee shareholder are taken in good faith and are not opposed to YOD WFOE’s best interests. Conversely, the Nominee Shareholders will not be entitled to dividends or other benefits generated therefrom, or receive any compensation in connection with this arrangement. The Letter of Indemnification will remain valid until either Nominee Shareholders or YOD WFOE terminates the agreement by giving the other party hereto 60 days’ prior written notice. In addition to the New Sinotop VIE Agreements, the Management Service Agreement between Sinotop Beijing and YOD Hong Kong continued to remain in effect, the key terms of which are as follows: Management Services Agreement Pursuant to a Management Services Agreement, as of March 9, 2010, YOD Hong Kong has the exclusive right to provide to Sinotop Beijing management, financial and other services related to the operation of Sinotop Beijing’s business, and Sinotop Beijing is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD Hong Kong. As compensation for providing the services, YOD Hong Kong is entitled to receive a fee from Sinotop Beijing, upon demand, equal to 100% of the annual net profits as calculated on accounting policies generally accepted in the PRC of Sinotop Beijing during the term of the Management Services Agreement. YOD Hong Kong may also request ad hoc quarterly payments of the aggregate fee, which payments will be credited against Sinotop Beijing’s future payment obligations. The Management Services Agreement also provides YOD Hong Kong, or its designee, with a right of first refusal to acquire all or any portion of the equity of Sinotop Beijing upon any proposal by the sole shareholder of Sinotop Beijing to transfer such equity. In addition, at the sole discretion of YOD Hong Kong, Sinotop Beijing is obligated to transfer to YOD Hong Kong, or its designee, any part or all of the business, personnel, assets and operations of Sinotop Beijing which may be lawfully conducted, employed, owned or operated by YOD Hong Kong, including: (a) business opportunities presented to, or available to Sinotop Beijing may be pursued and contracted for in the name of YOD Hong Kong rather than Sinotop Beijing, and at its discretion, YOD Hong Kong may employ the resources of Sinotop Beijing to secure such opportunities; (b) any tangible or intangible property of Sinotop Beijing, any contractual rights, any personnel, and any other items or things of value held by Sinotop Beijing may be transferred to YOD Hong Kong at book value; (c) real property, personal or intangible property, personnel, services, equipment, supplies and any other items useful for the conduct of the business may be obtained by YOD Hong Kong by acquisition, lease, license or otherwise, and made available to Sinotop Beijing on terms to be determined by agreement between YOD Hong Kong and Sinotop Beijing; (d) contracts entered into in the name of Sinotop Beijing may be transferred to YOD Hong Kong, or the work under such contracts may be subcontracted, in whole or in part, to YOD Hong Kong, on terms to be determined by agreement between YOD Hong Kong and Sinotop Beijing; and (e) any changes to, or any expansion or contraction of, the business may be carried out at the sole discretion of YOD Hong Kong, and in the name of and at the expense of, YOD Hong Kong; provided, however, that none of the foregoing may cause or have the effect of terminating (without being substantially replaced under the name of YOD Hong Kong) or adversely affecting any license, permit or regulatory status of Sinotop Beijing. The term of the Management Services Agreement is 20 years, and may not be terminated by Sinotop Beijing, except with the consent of, or a material breach by, YOD Hong Kong. Pursuant to the above contractual agreements, YOD WFOE can have the assets transferred freely out of Sinotop Beijing without any restrictions. Therefore, YOD WFOE considers that there is no asset of Sinotop Beijing that can be used only to settle obligations of Sinotop Beijing, except for the registered capital of the entity amounting to RMB10.6 million (approximately $1.6 million) as of December 31, 2017. As Sinotop Beijing is incorporated as limited liability companies under PRC Company Law, creditors of this entity do not have recourse to the general credit of other entities of the Company. b) Tianjin Sevenstarflix Network Technology Limited (“SSF”) VIE structure and arrangements To comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provides value-added telecommunication services, the Company plans to also provide its services through SSF, which is applying to hold the licenses and approvals to provide digital distribution and Internet content services in the PRC. The Company has the ability to control SSF through a series of contractual agreements, as described below, entered into among YOD WFOE, YOD Hong Kong, SSF and the legal shareholders of SSF. On April 5, 2016, YOD WFOE entered into variable interest entity agreements with SSF and its nominee shareholders pursuant to the Amended Tianjin Agreement dated December 21, 2015 (see Note 12(c)) (the “SSF VIE Agreements”). Lan Yang, holder of 99% equity ownership in SSF and a party to certain of the SSF VIE Agreements, is the spouse of Bruno Zheng Wu, the Company’s Chairman. Yun Zhu, holder of 1% equity ownership in SSF and a party to certain of the SSF VIE Agreements, is the Vice President of SSS. The terms of the SSF VIE Agreements are as follows: Equity Pledge Agreement Pursuant to the Equity Pledge Agreement among YOD WFOE, Lan Yang and Yun Zhu (the “Nominee Shareholders”), dated April 5, 2016, the Nominee Shareholders pledged all of their capital contribution rights in SSF to YOD WFOE as security for the performance of the obligations of SSF to make all the required technical service fee payments pursuant to the Technical Services Agreement and for performance of the Nominee Shareholders’ obligation under the Call Option Agreement. The terms of the Equity Pledge Agreement expire upon satisfaction of all obligations under the Technical Services Agreement and Call Option Agreement. Call Option Agreement Pursuant to the Call Option Agreement among YOD WFOE, SSF and the Nominee Shareholders, dated April 5, 2016, the Nominee Shareholders granted an exclusive option to YOD WFOE, or its designee, to purchase, at any time and from time to time, to the extent permitted under PRC law, all or any portion of the Nominee Shareholders’ equity in SSF. The exercise price of the option shall be determined by YOD WFOE at its sole discretion, subject to any restrictions imposed by PRC law. The term of the agreement is until all of the equity interest in SSF held by the Nominee Shareholders is transferred to YOD WFOE, or its designee and may not be terminated by any party to the agreement without consent of the other parties. Power of Attorney Pursuant to the Power of Attorney agreements among YOD WFOE, SSF and each of the respective Nominee Shareholders, dated April 5, 2016, each of the Nominee Shareholders granted YOD WFOE the irrevocable right, for the maximum period permitted by law, to all of its voting rights as shareholders of SSF. The Nominee Shareholders may not transfer any of their equity interest in SSF to any party other than YOD WFOE. The Power of Attorney agreements may not be terminated except until all of the equity in SSF has been transferred to YOD WFOE or its designee. Technical Service Agreement Pursuant to the Technical Service Agreement, dated April 5, 2016, between YOD WFOE and SSF, YOD WFOE has the exclusive right to provide technical service, marketing and management consulting service, financial support service and human resource support services to SSF, and SSF is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD WFOE. As compensation for providing the services, YOD WFOE is entitled to receive service fees from SSF equivalent to YOD WFOE’s cost plus 20-30% of such costs as calculated on accounting policies generally accepted in the PRC. YOD WFOE and SSF agree to periodically review the service fee and make adjustments as deemed appropriate. The term of the Technical Services Agreement is perpetual, and may only be terminated upon written consent of both parties. Spousal Consent Pursuant to the Spousal Consent, dated April 5, 2016, undersigned by the respective spouse of the Nominee Shareholders (collectively, the “Spouses”), the Spouses unconditionally and irrevocably agreed to the execution of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The Spouses agreed to not make any assertions in connection with the equity interest of SSF and to waive consent on further amendment or termination of the Equity Pledge Agreement, Call Option Agreement and Power of Attorney agreement. The Spouses further pledge to execute all necessary documents and take all necessary actions to ensure appropriate performance under these agreements upon YOD WFOE’s request. In the event the Spouses obtain any equity interests of SSF which are held by the Nominee Shareholders, the Spouses agreed to be bound by the SSF VIE Agreements, including the Technical Services Agreement, and comply with the obligations thereunder, including sign a series of written documents in substantially the same format and content as the SSF VIE Agreements. Letter of Indemnification Pursuant to the Letter of Indemnification among YOD WFOE and Lan Yang and YOD WFOE and Yun Zhu, both dated as of April 5, 2016, YOD WFOE agreed to indemnify Nominee Shareholders against any personal, tax or other liabilities incurred in connection with their role in equity transfer to the greatest extent permitted under PRC law. YOD WFOE further waived and released the Nominee Shareholders from any claims arising from, or related to, their role as the legal shareholder of SSF, provided that their actions as a nominee shareholder are taken in good faith and are not opposed to YOD WFOE’s best interests. The Nominee Shareholders will not be entitled to dividends or other benefits generated therefrom, or receive any compensation in connection with this arrangement. The Letter of Indemnification will remain valid until either the Nominee Shareholders or YOD WFOE terminates the agreement by giving the other party hereto 60 days’ prior written notice. Loan Agreement Pursuant to the Loan Agreement among YOD WFOE and the Nominee Shareholders, dated April 5, 2016, YOD WFOE agrees to lend RMB 19.8 million and RMB 0.2 million, respectively, to the Nominee Shareholders for the purpose of establishing SSF and for development of its business. As of December 31, 2017, RMB 27.6 million (US $4.2 million) and RMB nil have been lent to Lan Yang and Yun Zhu, respectively. Lan Yang has contributed all of the RMB 27.6 million (US $4.2 million) in the form of capital contribution. The loan can only be repaid by a transfer by the Nominee Shareholders of their equity interests in SSF to YOD WFOE or YOD WFOE’s designated persons, through (i) YOD WFOE having the right, but not the obligation to at any time purchase, or authorize a designated person to purchase, all or part of the Nominee Shareholders’ equity interests in SSF at such price as YOD WFOE shall determine (the “Transfer Price”), (ii) all monies received by the Nominee Shareholders through the payment of the Transfer Price being used solely to repay YOD WFOE for the loans, and (iii) if the Transfer Price exceeds the principal amount of the loans, the amount in excess of the principal amount of the loans being deemed as interest payable on the loans, and to be payable to YOD WFOE in cash. Otherwise, the loans shall be deemed to be interest-free. The term of the Loan Agreement is perpetual, and may only be terminated upon the Nominee Shareholders receiving repayment notice, or upon the occurrence of an event of default under the terms of the agreement. The loan extended to the Nominee Shareholders and the capital of SSF are fully eliminated in the consolidated financial statements. Management Services Agreement In addition to the SSF VIE Agreements, the Company’s subsidiary and the parent company of YOD WFOE, YOU On Demand (Asia) Limited, a company incorporated under the laws of Hong Kong (“YOD Hong Kong”) entered into a Management Services Agreement with SSF, dated as of April 6, 2016 (the “Management Services Agreement”). Pursuant to a Management Services Agreement, YOD Hong Kong has the exclusive right to provide to SSF management, financial and other services related to the operation of SSF’s business, and SSF is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD Hong Kong. As compensation for providing the services, YOD Hong Kong is entitled to receive a fee from SSF, upon demand, equal to 100% of the annual net profits as calculated on accounting policies generally accepted in the PRC of SSF during the term of the Management Services Agreement. YOD Hong Kong may also request ad hoc quarterly payments of the aggregate fee; which payments will be credited against SSF’s future payment obligations. In addition, at the sole discretion of YOD Hong Kong, SSF is obligated to transfer to YOD Hong Kong, or its designee, any part or all of the business, personnel, assets and operations of SSF which may be lawfully conducted, employed, owned or operated by YOD Hong Kong, including: (a) business opportunities presented to, or available to SSF may be pursued and contracted for in the name of YOD Hong Kong rather than SSF, and at its discretion, YOD Hong Kong may employ the resources of SSF to secure such opportunities; (b) any tangible or intangible property of SSF, any contractual rights, any personnel, and any other items or things of value held by SSF may be transferred to YOD Hong Kong at book value; (c) real property, personal or intangible property, personnel, services, equipment, supplies and any other items useful for the conduct of the business may be obtained by YOD Hong Kong by acquisition, lease, license or otherwise, and made available to SSF on terms to be determined by agreement between YOD Hong Kong and SSF; (d) contracts entered into in the name of SSF may be transferred to YOD Hong Kong, or the work under such contracts may be subcontracted, in whole or in part, to YOD Hong Kong, on terms to be determined by agreement between YOD Hong Kong and SSF; and (e) any changes to, or any expansion or contraction of, the business may be carried out in the exercise of the sole discretion of YOD Hong Kong, and in the name of and at the expense of, YOD Hong Kong; provided, however, that none of the foregoing may cause or have the effect of terminating (without being substantially replaced under the name of YOD Hong Kong) or adversely affecting any license, permit or regulatory status of SSF. The term of the Management Services Agreement is 20 years, and may not be terminated by SSF, except with the consent of, or a material breach by, YOD Hong Kong. Pursuant to the above contractual agreements, YOD WFOE can have the assets transferred freely out of SSF without any restrictions. Therefore, YOD WFOE considers that there is no asset of SSF that can be used only to settle obligation of YOD WFOE, except for the registered capital of SSF amounting to RMB 50.0 million (approximately $7.5 million), among which RMB 27.6 million (approximately $4.2 million) has been injected as of December 31, 2017. As SSF is incorporated as limited liability company under PRC Company Law, creditors of this entity do not have recourse to the general credit of other entities of the Company. Financial Information The following financial information of our VIEs’, as applicable for the periods presented, affected the Company’s consolidated financial statements. December 31, December 31, 2017 2016 ASSETS Current assets: Cash $ 3,898 $ 1,519,125 Accounts receivable, net - 1,260,529 Prepaid expenses 3,604 30,455 Other current assets 1,537 191,427 Intercompany receivables due from the Company’s subsidiaries (i) 2,494,505 150,725 Total current assets 2,503,544 3,152,261 Property and equipment, net - 196,677 Intangible assets, net - 2,570 Long-term investments 3,719,467 3,654,664 Other non-current assets - 442,782 Total assets $ 6,223,011 $ 7,448,954 LIABILITIES Current liabilities: Accounts payable $ - $ 5,817 Deferred revenue - 824,563 Accrued expenses - 268,074 Other current liabilities 41 394,314 Accrued license content fees - 1,236,661 Intercompany payables due to the Company’s subsidiaries (i) 3,601,454 14,752,338 Total current liabilities 3,601,495 17,481,767 Total liabilities $ 3,601,495 $ 17,481,767 2017 2016 Net revenue $ 794,273 $ 4,543,616 Net loss $ (4,356,188 ) $ (6,557,639 ) 2017 2016 Net cash used in operating activities $ (1,661,696 ) $ (2,497,637 ) Net cash used in investing activities $ (43,047 ) $ (2,896,492 ) Net cash provided by financing activities (i) $ 189,515 $ 6,555,377 (i) Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.2 million to SSF in 2017. The decrease in assets and liabilities mainly due to disposal of Zhong Hai Shi Xun Media as of June 30, 2017. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition | 5. Acquisition (i) Acquisition of SVG and Wide Angle On January 30, 2017, the Company entered into a Securities Purchase Agreement (the “Sun Video SPA”) with BT Capital Global Limited, a British Virgin Islands company (“BT”) which is controlled by Company’s Chairman Bruno Wu, for the purchase by SSC of all of the outstanding capital stock of Sun Video Group Hong Kong Limited, a Hong Kong corporation (“SVG”), for an aggregate purchase price of $800,000 and a $50 million Promissory Note (the “SVG Note”) with the principal and interest thereon convertible into shares of the Company’s common stock at a conversion rate of $1.50 per share. BT has guaranteed that SVG will achieve certain financial goals within 12 months of the closing. Until receipt of necessary shareholder approvals, the SVG Note is not convertible into shares of our common stock, but once the necessary shareholder approval is received, the unpaid principal and interest thereon will automatically convert. Under the terms of the Sun Video SPA, BT has guaranteed that the business of SVG and its subsidiaries (the “Sun Video Business”) shall achieve revenue of $250 million and $15 million of gross profit (collectively the “Performance Guarantees”) within 12 months of the closing. If the Sun Video Business fails to meet either of the Performance Guarantees within such time, BT shall forfeit back to the Company the shares of the Company’s common stock or the SVG Note, on a pro rata basis based on the Performance Guarantee for which the Sun Video Business achieves the lowest percentage of the respective amount guaranteed. In addition, if the Sun Video Business achieves more than $50 million in cumulative net income within 3 years of closing, (the “Net Income Threshold”), the Company shall pay BT 50% of the amount of any cumulative net income above the Net Income Threshold. Profit share payments shall be made on an annual basis, in either cash or stock at the discretion of our Board of Directors. If the Board decides to make the payment in stock, the number of our shares of common stock to be awarded shall be calculated based on the market price of such shares. After the acquisition SVG, the Company changed its name to Wecast Services Group Limited, and is therefore also referred to herein as Wecast Services. On January 31, 2017, the Company entered into a Securities Purchase Agreement (the “Wide Angle SPA”) with BT and Sun Seven Stars Media Group Limited, a Hong Kong company (“SSS”), one of the Company’s largest shareholders, controlled by our Chairman Bruno Wu, as guarantor, for the purchase by the Company of 55% of the outstanding capital stock of Wide Angle for the sole consideration of the Company adding Wide Angle to the Sun Video Business acquired by the Company under the Sun Video SPA and thereby including 100% of the revenue and gross profit from Wide Angle in the calculation of the SVG Performance Guarantees set forth in the Sun Video SPA considering the Company has consolidated Wide Angle. Since the Company, Wecast Services and Wide Angle were controlled by our Chairman Bruno Wu since November 10, 2016, as well as both before and after the acquisition, this transaction was accounted for as a business combination between entities under common control by Mr. Wu. Therefore, in accordance with ASC Subtopic 805-50, the consolidated financial statements of the Company include the acquired assets and liabilities of the SVG and Wide Angle at their historical carrying amounts. In addition, the Company’s consolidated financial statements as of December 31, 2016 have been prepared as if the Wecast Services and Wide Angle had been owned by the Company since November 10, 2016 presented and the Company’s consolidated financial statements as of December 31, 2016 has been retrospectively adjusted accordingly. As of December 31, 2017, the Company recorded the $24.3 million SVG Note as additional paid in capital based on the actual performance Considering the proceeds transferred were larger than carrying amounts of the net assets received, such $24.3 million was then recognized as a reduction to the Company’s additional paid in capital. The Company has not begun accruing any reserves relating to potential Net Income Threshold earnout payments, since the Sun Video Business is currently not close to exceeding this threshold. (ii) Acquisition of BBD Capital On December 7, 2017, the Company entered into a Securities Purchase Agreement (the “BBD Purchase Agreement”) with Tiger Sports Media Limited, a Hong Kong limited liability company (“Tiger”) pursuant to which the Company agreed to purchase Tiger’s 20% equity ownership in BBD Digital Capital Group Ltd. (“BBD Capital”), a New York corporation. SSC will purchase the 20% equity from Tiger for a total purchase price of $9.8 million (the “Transaction”) which consists of $2 million in cash and $7.8 million to be paid in the form of the Company’s capital stock (valued at $2.60 per share and equal to 3 million shares of the Company’s common stock). The valuation report will be received post-signing of the BBD Purchase Agreement with both parties agreeing that there is no obligation to close the Transaction until a satisfactory valuation report has been received, evaluated and approved by the Company’s Audit Committee. The Company shall pay the $2 million in cash upon the execution of the BBD Purchase Agreement and will issue the 3 million shares of Company common stock upon the closing of the Transaction which is contingent upon the receipt of a valuation report satisfactory to the Audit Committee. If the closing conditions to the Transaction are not satisfied, then Tiger has agreed to refund the $2 million cash payment to SSC within 15 days of notice from the Company. As of December 31, 2017, the Company has paid $2 million cash, however considering the deal was not closed until a satisfactory valuation report was obtained and approved by Audit Committee, and valuation report was not yet finished, the Company recorded it as prepaid expenses in its consolidated balance sheet. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable | 6. Accounts Receivable Accounts receivable is consisted of the following: December 31, December 31, 2017 2016 Accounts receivable, gross $ 26,965,731 $ 12,350,947 Less: allowance for doubtful accounts (3,646 ) (2,828,796 ) Accounts receivable, net $ 26,962,085 $ 9,522,151 The movement of the allowance for doubtful accounts is as follows: December 31, December 31, Balance at the beginning of the year $ (2,828,796 ) $ - Additions charged to bad debt expense (145,512 ) (2,825,124 ) Write-off of bad debt allowance 89,851 - Disposal of Zhong Hai Shi Xun 2,880,811 - Acquisition of WAG - (3,672 ) Balance at the end of the year $ (3,646 ) $ (2,828,796 ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 7. Property and Equipment, net The following is a breakdown of property and equipment: December 31, December 31, 2017 2016 Furniture and office equipment $ 301,006 $ 1,063,481 Vehicle 147,922 267,023 Office Building - 3,948,058 Leasehold improvements - 939,844 Total property and equipment 448,928 6,218,406 Less: accumulated depreciation (334,935 ) (1,254,681 ) Property and Equipment, net $ 113,993 $ 4,963,725 The Company recorded depreciation expense of approximately $ 219,705 and $194,174, which is included in its operating expense for the years ended December 31, 2017 and 2016, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 8. Intangible Assets As of December 31, 2017 and 2016, the Company’s amortizing and indefinite lived intangible assets consisted of the following: December 31, 2017 December 31, 2016 Gross Accumulated Impairment Net Gross Accumulated Impairment Net Amortizing Intangible Assets Charter/ Cooperation agreements (iii) $ - $ - $ - $ - $ 2,755,821 $ (909,257 ) $ (1,846,564 ) $ - Software and licenses 214,210 (199,626 ) - 14,584 267,991 (241,932 ) - 26,059 Patent and trademark (iv) 92,965 (39,943 ) (53,022 ) - 92,965 (39,943 ) - 53,022 Website and mobile app development (ii) - - - - 593,193 (421,129 ) (172,064 ) - Workforce (i) - - - - 305,694 (76,422 ) - 229,272 Total amortizing intangible assets $ 307,175 (239,569 ) (53,022 ) 14,584 $ 4,015,664 $ (1,688,683 ) $ (2,018,628 ) $ 308,353 Indefinite lived intangible assets Website name 134,290 - - 134,290 134,290 - - 134,290 Patent (iv) 10,599 - (10,599 ) - 10,599 - - 10,599 Total intangible assets $ 452,064 (239,569 ) (63,621 ) 148,874 $ 4,160,553 $ (1,688,683 ) $ (2,018,628 ) $ 453,242 (i) On April 1, 2016, the Company entered into an agreement with Mr. Liu Changsheng, under which SSC agreed to pay Mr. Liu Changsheng cash consideration of $187,653 and 66,500 shares of restricted shares with a six-month restriction period and a fair value of $121,695 in exchange for a workforce of 10 personnel experienced in programing content mobile apps. All 10 personnel entered into three-year employment contracts with SSC effective April 1, 2016. The Company also acquired certain laptop and desktop computers with fair value of $3,655. According to the agreement, 30% of the cash consideration is due upon the signing of the agreement, 20% is due 2 months after the signing of the agreement and 50% is due 6 months after the signing of the agreement. All cash consideration has been paid. If any of 3 key staff, as defined, terminated their employment with SSC during the first 12 months of employment, SSC has the right to forfeit the unpaid cash consideration. In addition, Mr. Liu Changsheng would be required to pay a default penalty at minimal of $129,180. SSC has accounted for the transaction as an asset acquisition in which SSC mainly acquired a workforce, which is recognized as an intangible asset at cost. Subsequently, the workforce intangible is amortized over the employment term of three years. In September, 2017, after evaluating the cost and benefit, Company decided to terminate the service contract with this entire team and therefore Company recognize impairment in the amount of $152,847, and at the December 31, 2017, the Company already terminated the service, and disposed of this intangible assets from consolidated balance sheet. (ii) Considering a new mobile app has been developed to be put into market in October 2016, the Company determined that the future cash flows generated from the old mobile app was nil. In accordance with ASC 350, Intangibles - Goodwill and Other (iii) During the fourth quarter of 2016, the Company determined that the Charter/Cooperation agreements will not serve the business or generate future cash flow. As no future cash flows will be generated from the Charter/Cooperation agreements, the Company estimated the fair value of the Charter/Cooperation agreements to be nil as of December 31, 2016. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from Charter/Cooperation agreements of $1,846,000 was recognized in 2016 to write off the entire book value of the Charter/Cooperation agreements. In June, 2017, this intangible asset has been disposed of along with other net assets in Zhong Hai Shi Xun. (iv) During the second quarter of 2017, the Company determined that one of its subsidiaries in the US will not serve the non-core business or generate future cash flow. As no future cash flows will be generated from using the patent owned by this subsidiary, the Company estimated the fair value of those patent to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patent of $63,621 was recognized in 2017 to write off the entire book value of the patent. The following table outlines the amortization expense for the following years: Amortization to be Years ending December 31, recognized 2018 $ 10,295 2019 4,289 Total amortization to be recognized $ 14,584 |
Long-term Investments
Long-term Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Long-term Investments | 9. Long-term Investments Cost method investments Cost method investments as of the year ended December 31, 2017 and 2016 are as follow: December 31, December 31, Topsgame (i) $ 3,365,969 $ 3,156,985 Frequency (ii) 3,000,000 3,000,000 DBOT (iii) 250,000 - Total $ 6,615,969 $ 6,156,985 (i) Investment in Topsgame On April 13, 2016, SSF entered into a Game Right Assignment Agreement with SSS for the acquisition of certain game IP rights (“Game IP Rights”) for approximately $2.7 million (RMB18 million) in cash. On April 15, 2016, SSF entered into a Capital Increase Agreement with Nanjing Tops Game Co., Ltd. (“Topsgame”) and its shareholders whereby SSF transferred the Game IP Rights acquired from SSS to Topsgame in exchange for 13% of Topsgame’s equity ownership. Topsgame is a PRC company that specializes in the independent development and operation of online, stand-alone and other games as well as the distribution of domestic and overseas games. The Company’s 13% ownership interest does not provide the Company with the right to nor does the Company have representation on the board of directors of Topsgame. The Company has recognized the cost of the investment in Topsgame, which is a private company with no readily determinable fair value, based on the acquisition cost of Game IP Rights of approximately $2.7 million and accounts for the investment by the cost method. On September 14, 2016, SSF increased its investment in Topsgame by RMB 3,900,000 (approximately $584,000) and maintained its 13% equity ownership of Topsgame. The investment continued to be accounted for using the cost method. The Company plans to sell investment in Topsgame, certain owned IP and investment in Frequency to one independent third party with consideration larger than its net book amount in 2018. The Company already signed the letter of intent with purchaser, and management believed that we can close the deal in 2018, along with one additional valuation report provided by qualified independent valuation firm, the Company did not make any impairment to either of these three long-lived assets as of December 31, 2017. (ii) Investment in Frequency In April 2016, the Company and Frequency Networks Inc. (“Frequency”) entered into a Series A Preferred Stock Purchase Agreement (the “SPA”) for the purchase of 8,566,271 shares of Series A Preferred Stock, Frequency (the “Frequency Preferred Stock”) for a total purchase price of $3 million. The 8,566,271 Series A Preferred Stock represent 9% ownership and voting interest on an as converted basis and does not provide the Company with the right to nor does the Company have representation on the board of directors of Frequency. The Frequency Preferred Stock is entitled to non-cumulative dividends at the rate of $0.02548 per share per annum, declared at the discretion of Frequency’s board of directors. The Frequency Preferred Stock is also convertible into shares of Frequency common stock at the Company’s election any time after issuance on a 1:1 basis, subject to certain adjustment. Each share of Frequency Preferred Stock also has a liquidation preference of $0.42467 per share, plus any declared but unpaid dividends. The Company has recognized the cost of the investment in Frequency, which is a private company with no readily determinable fair value, at its cost of $3 million and accounts for the investment by the cost method. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of our cost method investments, accordingly the fair value of our cost method investments are not estimated. (iii) Investment in DBOT In August, 2017, the Company made a strategic investment of US$250,000 in the Delaware Board of Trade Holdings, Inc. (“DBOT”) to acquire 187,970 common shares. DBOT is an approved and licensed FINRA- and SEC-regulated electronic trading platform with operations in Delaware. One of our subsidiaries is powered by DBOT’s platform, trading system and technology. The Company accounts for this investment using the cost method, as the Company owns less than 4% of the common shares and the Company has no significant influence over DBOT. On December 18, 2017, the Company enters into stock purchase agreement with certain existing DBOT shareholders to acquire their owned shares of common stock of DBOT in an aggregate amount of 2,543,546 shares. To acquire those shares, the Company agreed to issue in the aggregate amount of 1,627,869 SSC common stock. The closing of this transaction shall occur within 30 days of the execution of this agreement and obtain necessary approval such as FINRA, and therefore the Company did not issue the shares and recorded it as investment as of December 31, 2017. Equity method investments Equity method investment movement for the year of 2017 is as follow: December 31, 2017 January 1, 2017 Capital increase Loss on investment Impairment loss Foreign currency translation adjustments December 31, 2017 Wecast Internet (i) 132,782 (35,612 ) (93,481 ) - 2,355 6,044 Hua Cheng (ii) 364,897 - (35,712 ) - 24,313 353,498 Shandong Media (iii) - - - - - - Total 497,679 (35,612 ) (129,193 ) - 26,668 359,542 (i) Investment in Wecast Internet In October 2016, the Company’s subsidiary, YOU On Demand (Asia) Ltd., invested RMB 1,000,000 (approximately $149,750) in Wecast Internet Limited (“Wecast Internet”) and held its 50% equity ownership. In 2017, Wecast Internet closed its 100% owned subsidiary and the Company received $35,612 previous capital investment, and expects to receive the remaining from Wecast Internet in 2018. (ii) Investment in Hua Cheng As of the years ended December 31, 2017 and 2016, the Company held 39% equity ownership in Hua Cheng, and accounted for the investment by the equity method. (iii) Investment in Shandong Media As of the years ended December 31 2017 and 2016, the Company held 30% equity ownership in Shandong Media, and accounts for the investment by the equity method. The investment was fully impaired as of December 31, 2017 and 2016. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity On July 6, 2016, the Company entered into a Common Stock Purchase Agreement (the “SSW SPA”) with Seven Stars Works Co., Ltd., a Korea company (“SSW”) and an affiliate of SSS. Pursuant to the terms of the SSW SPA, the Company has agreed to sell and issue 2,272,727 shares of the Company’s common stock for $1.76 per share, or a total purchase price of $4.0 million to SSW. A total of $4.0 million was received and 2,272,727 shares were issued on July 19, 2016. On August 11, 2016, the Company entered into Common Stock Purchase Agreement (the “Harvest SPA”) with Harvest Alternative Investment Opportunities SPC (“Harvest”), a Cayman Islands company. Pursuant to the terms of the Harvest SPA, the Company has agreed to sell and issue 2,272,727 shares of the Company’s common stock, for $1.76 per share, or a total purchase price of $4.0 million to Harvest. A total of $4.0 million was received and 2,272,727 shares were issued on August 12, 2016. On November 11, 2016, the Company entered into Common Stock Purchase Agreement (the “SSSHKCD SPA”) with Sun Seven Stars Hong Kong Cultural Development Limited, a Hong Kong company (“SSSHKCD”) and an affiliate of SSS. Pursuant to the terms of the SSSHKCD SPA, the Company has agreed to sell and issue 1,136,365 shares of the Company’s common stock for $1.76 per share, or a total purchase price of $2.0 million to SSSHKCD. A total of $2.0 million was received and 1,136,365 shares were issued on November 17, 2016. As described in Note 13, the Company and SSS entered into a series of agreements, including an agreement pursuant to which the Company agreed to sell and issue 4,545,455 shares of the Company's common stock and warrants to acquire an additional 1,818,182 shares (at an exercise price of $2.75 per share) for an aggregate purchase price of $10 million to SSS. On May 19, 2017, the Company entered into a subscription agreement with certain investors, including officers, directors and other affiliates of the Company, pursuant to which the Company issued and sold to such investors, in a private placement, an aggregate of 727,273 shares of the common stock of the Company, for $2.75 per share, or a total purchase price of $2.0 million. Investors in the private placement included Lan Yang, the wife of the Company’s Chairman Bruno Wu, and China Telenet Ventures Limited, an entity owned and controlled by Sean Wang, a member of the Company’s Board of Directors. As of July 18, 2017, all subscription amounts have been received by the Company. On October 23, 2017, the Company entered into a Securities Purchase Agreement with Hong Kong Guo Yuan Group Capital Holdings Limited. Pursuant to the terms of the agreement, the Company has agreed to sell and issue 5,494,505 shares of the Company’s common stock to the Hong Kong Guo Yuan Group Capital Holdings Limited for $1.82 per share, or a total purchase price of $10.0 million. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11. Fair Value Measurements Accounting standards require the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The various levels of the fair value hierarchy are described as follows: • Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access. • Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. • Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Accounting standards require the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company reviews the valuation techniques used to determine if the fair value measurements are still appropriate on an annual basis, and evaluate and adjust the unobservable inputs used in the fair value measurements based on current market conditions and third party information. Common stock is valued at closing price reported on the active market on which the individual securities are traded. The fair value of the warrant liabilities was valued using Monte Carlo Simulation method at the year ended December 31, 2016. All the remaining warrant liabilities have been expired as of August 30, 2017. The following assumptions were incorporated: December 31, 2016 Risk-free interest rate 0.70 % Expected volatility 55 % Expected term 0.67 year Expected dividend yield 0 % The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis at December 31, 2016: December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Liabilities Warrant liabilities (see Note14) $ - $ - $ 70,785 $ 70,785 The table below reflects the components effecting the change in fair value for the years ended December 31, 2017 and 2016, respectively: Level 3 Assets and Liabilities For the Year Ended December 31, 2017 January 1, Settlements Change in December 31, Liabilities: Warrant liabilities (see Note 14) $ 70,785 $ (183,427 ) $ 112,642 $ - Level 3 Assets and Liabilities For the Year Ended December 31, 2016 Change in January 1, Fair Value December 31, 2016 Settlements gain 2016 Liabilities: Warrant liabilities (see Note14) $ 395,217 $ - $ (324,432 ) $ 70,785 The significant unobservable inputs used in the fair value measurement of the Company’s warrant liability includes the risk-free interest rate, expected volatility, expected term and expected dividend yield. Significant increases or decreases in any of those inputs in isolation would result in a significantly different fair value measurement. The carrying amount of cash, accounts receivable, notes receivable, accounts payable, accrued other expenses, other current liabilities and convertible promissory note as of December 31, 2017 and 2016, respectively, approximate fair value because of the short maturity of these instruments. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. Related Party Transactions Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. During the years ended December 31, 2016 and 2017, related party transactions consisted of the following: 2017 2016 Revenue from crude oil sale (g) $ 18,973,054 $ - Licensed content cost (b) - 219,000 Interest expense on convertible note (a) 120,000 120,000 (a) $3.0 Million Convertible Note On May 10, 2012, the Executive Chairman and Principal Executive Officer, Mr. Shane McMahon, made a loan to the Company in the amount of $3,000,000. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000 (the “Note”) at a 4% interest rate computed on the basis of a 365-day year. Upon issuance, the conversion price of the Note was equal to the price per share paid for securities by investors in the most recent financing (as of the date of conversion) of equity or equity-linked securities of the Company. Effective on January 31, 2014, the Company and Mr. McMahon entered into Amendment No. 4 to the Note pursuant to which the Note is at Mr. McMahon’s option, payable on demand or convertible on demand into shares of Series E Preferred Stock of the Company (the “Series E Preferred Stock”) at a conversion price of $1.75, until December 31, 2015. As a result, in 2014, the Company recognized a beneficial conversion feature discount calculated as the difference between the Series E Preferred Stock at its intrinsic value, which was the fair value of the common stock at the commitment date for the Series E Preferred Stock investment and the effective conversion price. As such, we recognized a beneficial conversion feature of approximately $2,126,000 in 2014 which was reflected as interest expense and additional paid-in capital since the note was payable upon demand. Effective December 30, 2014, the Company and Mr. McMahon entered into Amendment No. 5 pursuant to which the maturity date of the Note was extended to December 31, 2016. The Note remains payable on demand or convertible on demand into shares of Series E Preferred Stock at a conversion price of $1.75 at Mr. McMahon’s option. On December 31, 2016, the Company and Mr. McMahon entered into an amendment pursuant to which the Note will be at Mr. McMahon’s option, payable on demand or convertible on demand into shares of the Company’s Series E Preferred Stock, provided that the Note will no longer be convertible into Series E Preferred Stock upon the conversion of the Series E Preferred stock owned by C Media into the Company’s Common Stock (pursuant to which all Series E Preferred Stock will be automatically converted) but then convertible only into Common Stock at a conversion price of $1.50, until December 31, 2018. On November 9, 2017, the Board of Directors approved Amendment No. 7 to $3.0 million Convertible Promissory Notes (“Note”) issued to Mr. Shane McMahon, our Vice Chairman, pursuant to which the maturity date of the Note was extended to December 31, 2019. The Note remains payable on demand or convertible on demand into Common Stock at a conversion price of $1.50. In November, 2017, the Company paid such interest in the amount of $407,863 to Mr. Shane McMahon, and the accumulated interest payable as of December 31, 2017 was $20,055. For the years ended December 31, 2017 and 2016, the Company recorded interest expense of $120,000 and $120,000 related to the Note. (b) Cost of Revenue Hua Cheng, in which the Company holds 39% of the equity shares, charged us licensed content fees of approximately nil and $219,000 for the years ended December 31, 2017 and 2016, respectively. (c) Purchase of Game IP Rights On April 13, 2016, SSF entered into a Game Right Assignment Agreement with SSS for the acquisition of certain Game IP Rights for cash of $2.7 million (RMB 18 million), which was paid in full in 2016. The Game IP Rights was recorded at cost and then subsequently transferred in exchange for the investment in Topsgame as disclosed in Note 9 above. (d) Deposit for Investment in MYP On September 19, 2016, the Company signed a non-binding term sheet with Sun Video Group HK Limited (“SVG”) in purchase for its 51% ownership of M.Y. Products, LLC (“MYP”), a video commerce and supply chain management operator, in exchange for $50 million worth of Wecast Network common stock and $800,000 cash. In accordance with the Term Sheet, the Company wired $800,000 (or its RMB equivalent) to MYP upon signing the term sheet as Good Faith Deposit. As of December 31, 2017, the transaction has already been closed, and all of the deposit paid to MYP has been transferred into liability due to BT, which is the former shareholder of SVG. (e) Assets Disposal to BT On June 30, 2017, the Company entered into a Securities Purchase Agreement (the BT SPA) with BT, pursuant to which the issued and outstanding stock that SSC holds in three separate non-core assets were sold to BT in exchange for RMB100 million (approximately $14.75 million at current exchange rate) in a combination of cash and publicly traded stock to be paid to SSC within one year of closing. A minimum of 20% of the total consideration to SSC will be paid in cash (approximately $2.95 million). A portion of the consideration may be paid in the form of publicly traded stock at the discretion of BT, and in that case the securities will represent a public company affiliated with BT, in an industry related to SSC’s and with an average daily trading value of at least $146,000. These three separate non-core assets that sold to BT included 80% equity interest in Zhong Hai Shi Xun Media for zero, 13% equity interest in Nanjing Tops Game and 25% share capital investment right in Pantaflix JV in consideration of RMB100 million. As Zhong Hai Shi Xun Media is the Company’s subsidiary, sale of a subsidiary to a related party under common control would cause the Company to derecognize the net assets transferred at its carrying amounts and recognize no gains or losses. The difference between proceeds received and the carrying amount of the net assets transferred is recognized in additional paid in capital. At the same time, the Goodwill in the amount of $6.6 million has been pushed down to Zhong Hai Shi Xun Media along with the disposal. On November 28, 2017, due to strategic reasons, the Company and BT have agreed to amend the BT SPA, in which the Company will neither sell to BT the equity of Nanjing Tops Game Co., Ltd, and the equity of the Pantaflix joint venture nor receive the previously agreed upon consideration for such sales. But the Company will still sell to BT 80% of the outstanding capital stock of Zhong Hai Shi Xun Media to streamline the operations of the Company and to eliminate the Company’s exposure to any liabilities and obligations of Zhong Hai Shi Xun Media. As of December 31, 2017, the legal ownership transfer administration of Zhong Hai Shi Xun Media was still not yet finished, however based on the agreement signed between the Company and BT and the consent obtained from minority shareholder of Zhong Hai Shi Xun Media, the Company believed it no longer have right over its asset and no obligation to its liability, and the Company therefore no longer consolidate Zhong Hai Shi Xun Media since July 1, 2017. (f) Acquisition of Guang Ming On December 7, 2017, the Company entered into a Securities Purchase Agreement with Shanghai Guang Ming Investment Management Limited, a PRC limited liability entity (“Guang Ming”), Tianjin Sun Seven Stars Culture Development Co. Ltd. (“Tianjin”) and Beijing Nanbei Huijin Investment Co. Ltd. SSC will purchase 100% of Guang Ming’s issued and outstanding shares for a total purchase price of RMB 2.4 million (approximately $363,436). Guang Ming holds a special fund management license and SSC’s purpose for making the acquisition is to develop a fund management platform. The closing of the acquisition is conditioned upon, among other things, the sellers, including Guang Ming, obtaining all of the necessary approvals from the Asset Management Association of China (“AMAC”), a self-regulatory organization which oversees and regulates fund management companies in China. In the event that AMAC does not accept the sellers’ submission for change of ownership, this agreement shall be rescinded and the sellers shall continue their ownership of Guang Ming and shall refund any portion of the purchase price previously paid within 15 days of notice from the Company. This agreement was approved by the Company’s Audit Committee and the closing of the Acquisition is also subject to the receipt of a fairness opinion and valuation report satisfactory to the Company and which concludes that the purchase price of the acquisition is fair from a financial point of view to the Company. The acquisition is deemed to be a related party transaction because Tianjin is an affiliate of Bruno Wu, the Company’s Chairman and Chief Executive Officer. As of December 31, 2017, the fairness opinion was not yet obtained, and the Company did account for this acquisition as of year-end of 2017 due to closing condition was not satisfied. (g) Crude Oil Trading In December, 2017, One of our crude oil transaction was sold to one entity of which our minority shareholder has significant influence upon. Even though the crude oil was eventually sold to independent third party, the Company has recorded this sale as one separate related party sale in its financial statement. As of December 31, 2017, invoice related to this transaction has been collected as payment term of this transaction is pre-payment for full invoice value on pre-payment due date one or two business days before the notice of readiness tendered. |
SSS Agreements
SSS Agreements | 12 Months Ended |
Dec. 31, 2017 | |
Sss Agreements [Abstract] | |
SSS Agreements | 13. SSS Agreements On November 23, 2015, the Company entered into a series of agreements for a strategic investment by SSS, a PRC company in the media and entertainment industry that is controlled by the Company’s Chairman, Bruno Zheng Wu. The strategic investment by SSS included a private placement of equity securities of the Company, a content licensing agreement, and the potential for Tianjin Enternet Network Technology Limited (“Tianjin Enternet”), an affiliate of SSS, to earn additional shares of the Company’s common stock contingent on the performance of SSF. SSF intends to provide a branded pay content service, consumer payments and behavior data analysis service, customer management and data-based service and mobile social TV-based customer management service. On December 21, 2015, the Company entered into an Amended and Restated Securities Purchase Agreement (the “Amended SSS Purchase Agreement”) and a Revised Content License Agreement (the “Revised Content Agreement”) with SSS which amended certain terms of the original agreements dated November 23, 2015. In addition, the Company also entered into an Amended and Restated Share Purchase Agreement (the “Amended Tianjin Agreement”) with Tianjin Enternet. On July 6, 2016, the Company entered into a Common Stock Purchase Agreement with Seven Stars Works Co., Ltd., a Korea company (“SSW”) and an affiliate of SSS for the purchase by SSW of 2,272,727 shares of the Company’s common stock, for $1.76 per share, or a total purchase price of $4.0 million. On November 11, 2016, the Company entered into a Common Stock Purchase Agreement with Sun Seven Stars Hong Kong Cultural Development Limited, a Hong Kong company (“SSSHKCD”) and an affiliate of SSS. Pursuant to the terms of the SPA, the Company has agreed to sell and issue 1,136,365 shares of the Company’s common stock, for $1.76 per share, or a total purchase price of $2.0 million to SSSHKCD. (a) Amended SSS Purchase Agreement On March 28, 2016, pursuant to the Amended SSS Purchase Agreement, the Company sold, and SSS purchased, 4,545,455 shares of the Company’s common stock for a purchase price of $2.20 per share, or an aggregate of $10.0 million. In addition, SSS received a two-year warrant to acquire an additional 1,818,182 shares of the Company’s common stock at an exercise price of $2.75 per share (the “SSS Warrant”). Until receipt of necessary shareholder approvals, the SSS Warrant may not be exercised to the extent that such exercise would result in SSS and its affiliates beneficially owning more than 19.99% of the Company’s outstanding common stock. On June 27, 2016, shareholder approval was obtained. Since the SSS Warrant does not embody any future obligation for the Company to repurchase its own shares, is indexed to the Company’s own stock, may only be settled by the physical delivery of shares, and no conditions exist in which net cash settlement could be forced upon the Company by SSS in any other circumstances, the SSS Warrant is considered an equity classified instrument. The proceeds of $10.0 million, net of issuance cost of approximately $411,000, was allocated to common stock and SSS Warrant based on their relative fair value as of March 28, 2016 of approximately $8,227,000 and $673,000, respectively. Accordingly, the Company recorded approximately $725,000 in additional paid-in capital for the SSS Warrant. (b) Revised Content Agreement On March 28, 2016, pursuant to the Amended and Restated SSS Purchase Agreement, SSS granted the Company non-exclusive royalty-free distribution rights for certain video content value in exchange for a convertible promissory note (the “SSS Note”). The SSS Note has a stated principal amount of approximately $17,718,000, was originally due to mature on May 21, 2016. On May 12, 2016, the Company and SSS entered into an amendment agreement to extend the maturity date of the SSS Note to July 31, 2016. The SSS Note beard an interest at the rate of 0.56% per annum. Immediately upon the receipt of the required shareholder approval to allow SSS to beneficially own more than 19.99% of the Company’s outstanding common stock, which was obtained on June 27, 2016, the SSS Note was converted into 9,208,860 shares of the Company’s common stock. In connection with the issuance of the SSS Note, the Company recorded debt issuance costs of approximately $131,000 which was to be amortized over the period of the SSS Note’s maturity date, of which approximately $123,000 was recognized during the year ended December 31, 2016. The Company measured the effective conversion price of the SSS Note using its carrying value on March 28, 2016 and compared it to the fair value of the Company’s common stock on that date. As the effective conversion price of the SSS Note of $1.91 exceeded the fair value of the Company’s common stock of $1.81, no beneficial conversion feature was recognized. The carrying value of the SSS Note as of June 27, 2016, which included the unamortized issuance costs of $8,000 and, pursuant to the terms of SSS Note, accrued interest expense of $25,000 has been recorded into the common shares issued on June 27, 2016. (c) Amended Tianjin Agreement Pursuant to the Amended Tianjin Agreement dated December 21, 2015, Tianjin Enternet was to contribute 100% of the equity ownership of SSF, a newly-formed subsidiary of Tianjin Enternet to the Company. Contingent on the performance of SSF, Tianjin Enternet was to receive shares of the Company’s common stock over three years, with the exact number not exceeding 5.0 million per year, provided the earn-out provisions for each of the 2016, 2017 and 2018 annual periods (the “Earn-Out Share Award”) was achieved. The earn-out provision for 2016, 2017 and 2018 are either 50.0 million homes/users passed or $4.0 million net income, 100.0 million homes/users passed or $6.0 million net income and 150.0 million homes/users passed or $8.0 million net income, respectively. In the event that the Company has not obtained the required vote from shareholders to issue the earn-out shares to Tianjin Enternet, the Company was required to issue a promissory note with a principal amount equal to the quotient by multiplying 5.0 million by the applicable stock price defined in the agreement. On April 5, 2016, in lieu of Tianjin Enternet contributing 100% of the equity ownership of SSF to the Company, YOD WFOE entered into VIE agreements with SSF and its legal shareholders in order to comply with PRC regulatory requirements on certain industries. SSF is 99% owned by Lan Yang, the spouse of Bruno Zheng Wu, the Company’s Chairman, and 1% owned by Yun Zhu, a Vice President of Wecast Network. By virtue of these VIE agreements; YOD WFOE obtained financial controlling interest in SSF, including the power to direct the activities of SSF, and therefore is the primary beneficiary of SSF. As the control of SSF was transferred to YOD WFOE through both the VIE agreements and physical handover of company documents on April 5, 2016, the transaction was determined to be completed on that date. At the time YOD WFOE obtained control over SSF, SSF had no assets, liabilities, employees or operating activities, nor did it hold any licenses, trade names or other intellectual properties. The Company also did not receive any assets, employees, contracts, sales or distribution systems or intellectual property from Tianjin Enternet in connection with the transaction. Since the acquisition of SSF did not include any input or processes, as defined under ASC 805-10-20, the transaction was not considered a business combination under ASC 805. The earn-out provision was originally based on either the number of home/user pass or the net income of SSF. While the net income was to be measured based on the operations of SSF, the number of home/user pass is measured based on number of home/user pass of SSF’s distributors. Such earn-out provision is based on an index that is not calculated solely by reference to the operations of SSF, which is not considered indexed to the Company’s own shares. Also the earn-out provisions permit cash settlement if the Company cannot issue the earn-out shares. Therefore, the earn-out provision is classified as a liability and measured initially and subsequently at fair value with changes in fair value recognized in earnings at each reporting periods. On June 27, 2016, the Company held its 2016 annual meeting of stockholders and received approval from its stockholders to allow SSS to beneficially own more than 19.99% of the Company’s outstanding common stock. Accordingly, the Earn-Out Share Award became issuable at the time when the earn-out provisions are considered to have been met pursuant to the Amended Tianjin Agreement. On November 10, 2016, the Board of Directors (the “Board”) of SSC held a special meeting. At the recommendation of the Company’s audit committee, the Board determined that it is in the best interests of the Company and the Company’s shareholders to amend the terms of the Earn-Out Share Award to (1) reduce the total Earn-Out Share Award from 15,000,000 shares of Common Stock to 10,000,000 shares of Common Stock and (2) measure the achievement of the earn-out provisions based on the Companywide achievement of homes passed in lieu of the measurement being measured by SFF’s stand-alone achievement of homes passed. Based on evidence provided to the Board, the requisite thresholds necessary to trigger issuance of all shares of Common Stock subject to the Earn-Out Share Award have been achieved. Accordingly, on November 10, 2016, the Board approved the issuance of 10,000,000 shares of its common stock, par value $0.001 per share (“Common Stock to SSS”) and the shares were issued on November 11, 2016. The Company recognized the fair value of the Common Stock to SSS of approximately $13,700,000, based on the market price of the Company’s Common Stock, as Earn-out share award expense in the accompanying consolidated statement of operations for the year ended 31 December, 2016. No such share award expense was recorded for the year ended December 31, 2017. |
Warrant Liabilities
Warrant Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Warrant Liabilities [Abstract] | |
Warrant Liabilities | 14. Warrant Liabilities In connection with our August 30, 2012 private financing, the Company issued 977,063 warrants to investors and the broker. In accordance with ASC 815-40, Contracts in Entity’s Own Equity As of December 31, 2016, the warrant liability was revalued as disclosed in Note 10, and recorded at its fair value of approximately $70,785. In 2017, there were 182,534 warrants exercised and all the remaining 353,716 warrants were expired as of August 30, 2017. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Share-Based Payments | 15. Share-Based Payments As of December 31, 2017, the Company has 1,853,391 options, 109,586 restricted shares and 2,521,896 warrants outstanding (including the 1,818,182 warrants issued to SSS as disclosed in Note 13 (a)) to purchase shares of our common stock. The Company awards common stock and stock options to employees and directors as compensation for their services, and accounts for its stock option awards to employees and directors pursuant to the provisions of ASC 718, Stock Compensation The following table provides the details of the total share-based payments expense during the years ended December 31, 2017 and 2016: December 31, December 31, 2017 2016 Employees and directors share-based payments $ 1,305,829 $ 319,718 Effective as of December 3, 2010, our Board of Directors approved the SSC 2010 Stock Incentive Plan (“the 2010 Plan”) pursuant to which options or other similar securities may be granted. The maximum aggregate number of shares of our common stock that may be issued under the Plan is 4,000,000 shares. As of December 31, 2017, options available for issuance are 1,368,243 shares. (a) Stock Options Stock option activity for the year ended December 31, 2017 is summarized as follows: Options Weighted Average Exercise Weighted Average Remaining Contractual Aggregated Intrinsic Outstanding at January 1, 2017 2,101,428 $ 2.42 4.59 $ - Granted 733,200 4.34 Exercised (258,455 ) 1.83 Expired (89,731 ) 3.22 Forfeited (633,051 ) 2.81 Outstanding at December 31, 2017 1,853,391 $ 3.20 2.99 $ 0.02 Vested and expected to be vested as of December 31, 2017 1,853,391 $ 3.20 2.99 $ 0.02 Options exercisable at December 31, 2017 (vested) 1,662,591 $ 3.19 4.38 $ 0.03 On January 4, March 1, March 16, November 1, and November 17, 2017, 90,000, 45,000, 35,000, 60,000 and 503,200 shares stock options, respectively, were issued to certain employees or board members for services provided to us. The fair value of the stock options granted were valued using the Black-Scholes Merton method on the grant date, amounting to $61,200, $45,443, $36,750, $79,200 and $1,953,416, respectively. As of December 31, 2017, approximately $429,585 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 1.42 years. The total fair value of shares vested during the years ended December 31, 2017 and 2016 was approximately $974,237 and $12,000, respectively. The following table summarizes the assumptions used to estimate the fair values of the share options granted in the years presented: December 31, December 31, 2017 2016 Expected term 5.4 ~5.9 years 1.7 ~5.9 years Expected volatility 55% ~ 85 % 55% ~ 70 % Expected dividend yield 0 % 0 % Risk free interest rate 2.04% ~2.29 % 0.54% ~1.35 % (b) Warrants In connection with the Company’s financings, the Warner Brother Agreement and service agreements, the Company issued warrants to investors and service providers to purchase common stock of the Company. As of December 31, 2017, the weighted average exercise price was $2.47 and the weighted average remaining life was 0.47 years. The following table outlines the warrants outstanding and exercisable as of December 31, 2017 and December 31, 2016: 2017 2016 Number of Number of Warrants Warrants Outstanding and Outstanding and Exercise Expiration Warrants Outstanding Exercisable Exercisable Price Date 2012 August Financing Warrants (i) - 536,250 $ 1.50 08/30/17 2013 Broker Warrants (Series D Financing) - 228,571 $ 1.75 07/05/18 2013 Broker Warrants (Convertible Note) - 114,285 $ 1.75 11/04/18 2014 Broker Warrants (Series E Financing) 703,714 1,085,714 $ 1.75 01/31/19 2016 Warrants to SSS (Note 12) 1,818,182 1,818,182 $ 2.75 03/28/18 2,521,896 3,783,002 (i) The warrants are classified as derivative liabilities as disclosed in Note 11. (c) Restricted Shares In January, 2017, the Company granted 35,000 restricted shares to one employee under the “2010 Plan”. The restricted shares have a vesting period of four years with the first one-fourth vesting on the first anniversary from grant date and the remaining three-fourth vesting ratably over twelve quarters. The grant date fair value of the restricted shares was $43,750. As this employee left the Company in February, no expense was recorded. In March and April, 2017, the Company granted 365,000 restricted shares to certain employees under the “2010 Plan”. The restricted shares have a vesting period of four years with the first one-fourth vesting on the first anniversary from grant date and the remaining three-fourth vesting ratably over twelve quarters. The grant date fair value of the restricted shares was $778,200. In November, 2017, the Board of Directors approved 2017 independent board compensation plan, which approved to grant 4,488 restricted shares to each of four then independent directors under the “2010 Plan”. The restricted shares were all vested immediately since commencement date. The aggregated grant date fair value of all those restricted shares was $100,000. A summary of the restricted shares is as follows: Shares Weighted-average Restricted shares outstanding at January 1, 2017 228,550 $ 1.75 Granted 417,953 2.21 Forfeited (401,249 ) 2.02 Vested (135,668 ) 2.24 Restricted shares outstanding at December 31, 2017 109,586 1.92 |
Loss Per Common Share
Loss Per Common Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Loss Per Common Share | 16. Loss Per Common Share 2017 2016 Net loss attributable to common stockholders $ (9,835,601 ) $ (26,407,974 ) Basic Basic weighted average common shares outstanding 61,182,209 35,998,001 Diluted Diluted weighted average common shares outstanding 61,182,209 35,998,001 Net loss per share: Basic $ (0.16 ) $ (0.73 ) Diluted $ (0.16 ) $ (0.73 ) Basic loss per common share attributable to Seven Stars Cloud shareholders is calculated by dividing the net loss attributable to Seven Stars Cloud shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive. The following table includes the number of shares that may be dilutive potential common shares in the future. These shares were not included in the computation of diluted loss per share because the effect was either antidilutive or the performance condition was not met. December 31, December 31, 2017 2016 Warrants 2,521,896 3,783,002 Options 2,162,977 2,101,428 Series A Preferred Stock 933,333 933,333 Series E Preferred Stock - 7,154,997 Convertible promissory note and interest 35,346,703 2,371,945 Total 40,964,909 16,344,705 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 17. Income Taxes (a) Corporate Income Tax (“CIT”) Seven Stars Cloud Group, Inc. and M.Y. Products LLC, incorporated in Nevada and Indiana respectively, are subject to U.S. federal and state income tax. CB Cayman was incorporated in Cayman Islands as an exempted company and is not subject to income tax under the current laws of Cayman Islands. Most of the Company’s income is generated in Hong Kong in 2017. YOD Hong Kong, WAG Hong Kong and Amer were incorporated in HK. The statutory income tax rate in HK is 16.5%. Seven Stars Energy is incorporated in Singapore in late 2017 which is conducting crude oil trading business. The statutory income tax rate in Singapore is 17%. YOD WFOE, Sinotop Beijing, and Sevenstarflix are PRC entities. The income tax provision of these entities is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in the PRC. In accordance with the Corporate Income Tax Law of the PRC (“CIT Law”), effective beginning on January 1, 2008, enterprises established under the laws of foreign countries or regions and whose “place of effective management” is located within the PRC territory are considered PRC resident enterprises and subject to the PRC income tax at the rate of 25% on worldwide income. The definition of “place of effective management” refers to an establishment that exercises, in substance, and among other items, overall management and control over the production and business, personnel, accounting, and properties of an enterprise. If the Company’s non-PRC incorporated entities are deemed PRC tax residents, such entities would be subject to PRC tax under the CIT Law. Since our non-PRC entities have accumulated loss, the application of this tax rule will not result in any PRC tax liability, if our non-PRC incorporated entities are deemed PRC tax residents. The CIT Law imposes a 10% withholding income tax, subject to reduction based on tax treaty where applicable, for dividends distributed by a foreign invested enterprise to its immediate holding company outside China. Under the PRC-HK tax treaty, the withholding tax on dividends is 5% provided that a HK holding company qualifies as a HK tax resident as defined in the tax treaty. No provision was made for the withholding income tax liability as the Company’s foreign subsidiaries were in accumulated loss. Loss before tax and the provision for income tax benefit consists of the following components: 2017 2016 Loss before tax United States $ (8,461,323 ) $ (15,069,992 ) PRC/Hong Kong/Singapore (1,731,546 ) (12,966,714 ) (10,192,869 ) (28,036,706 ) Deferred tax benefit of net operating loss United States $ - $ - PRC/Hong Kong/Singapore - (330,124 ) - (330,124 ) Deferred tax benefit other than benefit of net operating loss United States - - PRC/Hong Kong - - Total income tax benefit $ - $ (330,124 ) A reconciliation of the expected income tax derived by the application of the 34.0% U.S. corporate income tax rate to the Company’s loss before income tax benefit is as follows: 2017 2016 U. S. statutory income tax rate 34.0 % 34.0 % Non-deductible expenses: Earn out shares award expense 0.0 % -16.6 % Waiver of intercompany loan related to ZHV disposal 14.7 % 0.0 % Others -2.9 % -3.3 % Non-deductible interest expenses -0.4 % -0.3 % Non-taxable change in fair value warrant liabilities -0.4 % 0.4 % Increase in valuation allowance -21.6 % -8.2 % Tax rate differential -23.4 % -3.3 % Others 0.0 % -1.5 % Effective income tax rate 0.0 % 1.2 % Deferred income taxes are recognized for future tax consequences attributable to temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and income tax purposes using enacted rates expected to be in effect when such amounts are realized or settled. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2017 and 2016 are as follows: 2017 2016 U.S. NOL $ 6,152,242 $ 12,501,988 Foreign NOL 5,365,437 5,765,422 Accrued payroll and expense 132,812 226,950 Nonqualified options 760,213 576,975 Provision for doubtful accounts - 412,102 Impairment of licensed content - 124,810 Others $ 30,040 $ 31,120 Total deferred tax assets 12,440,744 19,639,367 Less: valuation allowance (12,440,744 ) (19,639,367 ) As of December 31, 2017, the Company had approximately $29.3 million U.S domestic cumulative tax loss carryforwards and approximately $25.5 million foreign cumulative tax loss carryforwards, which may be available to reduce future income tax liabilities in certain jurisdictions. No U.S. tax loss would be expired based on new Tax Law. These PRC tax loss carryforwards will expire beginning year 2018 to year 2022. Utilization of net operating losses may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state and foreign provisions. This annual limitation may result in the expiration of net operating losses before utilization. Realization of the Company’s net deferred tax assets is dependent upon the Company’s ability to generate future taxable income in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences and net operating loss carryforwards. The valuation allowance decreased approximately $7.2 million and increased $2.9 million during the years ended December 31, 2017 and 2016, respectively. The decrease of 2017 was primarily related to the reduce of U.S. effective tax rate from 34% to 21% since 2018. (b) Uncertain Tax Positions Accounting guidance for recognizing and measuring uncertain tax positions prescribes a threshold condition that a tax position must meet for any of the benefit of uncertain tax position to be recognized in the financial statements. There was no identified unrecognized tax benefit as of December 31, 2016 and 2017. As of December 31, 2017 and 2016, the Company did not accrue any material interest and penalties. The Company’s United States income tax returns are subject to examination by the Internal Revenue Service for at least 2010 and later years. Due to the uncertainty regarding the filing of tax returns for years before 2007, it is possible that the Company is subject to examination by the IRS for earlier years. All of the PRC tax returns for the PRC operating companies are subject to examination by the PRC tax authorities for all periods from the companies’ inceptions in 2007 through 2017 as applicable. (c) U.S. Tax Reform On December 22, 2017 the U.S. enacted the “Tax Cuts and Jobs Act” (“U.S. Tax Reform”) which made significant changes to corporate income tax law. One significant change was to decrease the general corporate income tax rate from 34% to 21%. This change in the rate reduced the Company’s deferred tax assets at December 31, 2017 by approximately $4.4 million. This reduction had no effect on the Company’s income tax expense as the reduction in deferred tax assets was offset by an equivalent reduction in the valuation allowance. Another significant change resulting from the TCJA is that any future remittances to the parent company from business income earned by its subsidiaries outside of the U.S. will no longer to taxable to the Company under U.S. tax law. The Company would be liable for payment of income tax, or reduction of the net operating loss carryover, at a reduced rate for any accumulated earnings and profits of its non-U.S. subsidiaries at December 31, 2017. Any such tax would be payable over eight years. The Company’s provisional estimate is that there are no such accumulated earnings and profits at December 31, 2017 and consequently no tax would be payable. The Company continues to gather information relating to this estimate and expects to confirm this estimate during 2018. |
Contingencies and Commitments
Contingencies and Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | 18. Contingencies and Commitments (a) Operating Lease Commitment The Company is committed to paying leased property costs related to our offices as follows: Leased Property Year ending December 31, Costs 2018 $ 733,439 2019 185,444 2020 189,933 Thereafter 94,967 Total $ 1,203,783 (b) Lawsuits and Legal Proceedings From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. As of December 31, 2017, there are no such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. |
Concentration, Credit and Other
Concentration, Credit and Other Risks | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration, Credit and Other Risks | 19. Concentration, Credit and Other Risks (a) PRC Regulations The PRC market in which the Company operates poses certain macro-economic and regulatory risks and uncertainties. These uncertainties extend to the ability of the Company to conduct wireless telecommunication services through contractual arrangements in the PRC since the industry remains highly regulated. The Company conducts legacy YOD business in China through a series of contractual arrangements entered among YOD WFOE, Sinotop Beijing, SSF and the respective legal shareholders of Sinotop Beijing and SSF. The Company believes that these contractual arrangements are in compliance with PRC law and are legally enforceable. If Sinotop Beijing, SSF or their respective legal shareholders fail to perform the obligations under the contractual arrangements or any dispute relating to these contracts remains unresolved, YOD WFOE or YOD HK can enforce its rights under the VIE contracts through PRC law and courts. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. In particular, the interpretation and enforcement of these laws, rules and regulations involve uncertainties. If YOD WFOE had direct ownership of Sinotop Beijing and SSF, it would be able to exercise its rights as a shareholder to effect changes in the board of directors of Sinotop Beijing or SSF, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, the Company relies on Sinotop Beijing, SSF and their respective legal shareholders to perform their contractual obligations to exercise effective control. The Company also gives no assurance that PRC government authorities will not take a view in the future that is contrary to the opinion of the Company. If the current ownership structure of the Company and its contractual arrangements with the VIEs and their equity holders were found to be in violation of any existing or future PRC laws or regulations, the Company's ability to conduct its business could be affected and the Company may be required to restructure its ownership structure and operations in the PRC to comply with the changes in the PRC laws which may result in deconsolidation of the VIEs. In addition, the telecommunications, information and media industries remain highly regulated. Restrictions are currently in place and are unclear with respect to which segments of these industries foreign owned entities, like YOD WFOE, may operate. The PRC government may issue from time to time new laws or new interpretations on existing laws to regulate areas such as telecommunications, information and media, some of which are not published on a timely basis or may have retroactive effect. For example, there is substantial uncertainty regarding the Draft Foreign Investment Law, including, among others, what the actual content of the law will be as well as the adoption and effective date of the final form of the law. Administrative and court proceedings in China may also be protracted, resulting in substantial costs and diversion of resources and management attention. While such uncertainty exists, the Company cannot assure that the new laws, when it is adopted and becomes effective, and potential related administrative proceedings will not have a material and adverse effect on the Company's ability to control the affiliated entities through the contractual arrangements. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws, and the Company’s legal structure and scope of operations in the PRC, which could be subject to further restrictions resulting in limitations on the Company’s ability to conduct business in the PRC. (b) Major Customers Legacy YOD business The Company has agreements with distribution partners, including digital cable operators, IPTV operators, OTT streaming operators and mobile smartphone manufacturers and operator. A distribution partner that individually generates more than 10% of the Company’s revenue is considered a major customer. On October 8, 2016, the Company signed an agreement to form a partnership with Zhejiang Yanhua ("Yanhua Agreement"), where Yanhua will act as the exclusive distribution operator (within the territory of the People's Republic of China) of WCST's licensed library of major studio films. According to the Yanhua Agreement, the existing legacy Hollywood studio paid contents as well as other IP contents specified in the agreement, along with the corresponding authorized rights letter that WCST is entitled to, will be turned over to Yanhua as a whole package, which was agreed to be priced at RMB13,000,000. In addition to the above-mentioned minimal guarantee fee of RMB13,000,000 specified, there is a provision in the Yanhua Agreement which states that once the revenue recognized from the existing contents transferred from WCST to Yanhua reaches the amount of RMB13,000,000, the revenue above RMB13,000,000 will be shared with WCST from the date when this revenue threshold is reached based on certain revenue-sharing mechanism stipulated in the Yanhua Agreement. Pursuant to ASC Subtopic 926-605, Entertainment-Films - Revenue Recognition, for certain contracts that involve sub-licensing content within the specified license period, revenue is recognized upon delivery of films when the arrangement includes a nonrefundable minimum guarantee, delivery is complete and there are no substantive future obligations to provide future additional services. According to the Yanhua Agreement, the total price of the Existing Contents to be transferred is RMB13,000,000. The payment is agreed to be paid in two installments, the first half of RMB6,500,000 was received on December 30, 2016. The remaining RMB6,500,000 will be paid under the scenario that the license content fees due to Studios for the existing legacy Hollywood paid contents will be settled. Due to the fact that the second installment will depend upon some future events and is contingent in nature, we deem this portion of the fee is not fixed or determinable and therefore, this portion of the revenue did not meet the revenue recognition criteria to be recognized accordingly. In terms of the additional revenue-sharing fee over the above-mentioned RMB13,000,000 fee specified, considering that this part of arrangement fee is not fixed or determinable at the time point as of December 31, 2017, it has not met the criteria for revenue recognition, management will recognize it once it becomes determinable and meet the other revenue recognition criteria in the future. Pursuant to the Yanhua Agreement, RMB6,500,000 was recognized as revenue in 2017 based on the relative fair value of licensed content delivered to Yanhua. For the year ended December 31, 2016, four customers which are Aishang TV, Huawei, Dongfang Shijie and Bo Tai Heng Tong accounted for 22%, 15%, 12% and 10% of the Company’s legacy YOD business revenue, respectively. Aishang TV accounted for 93% of the Company’s legacy YOD business net accounts receivables as of December 31, 2016. Wecast Services The holdings and businesses from Company’s two acquisitions in January 2017 (Note 5) now reside under “Wecast Services”, our wholly-owned subsidiary Wecast Services Group Limited. Wecast Services (which resides under the Product Sales Cloud) is currently primarily engaged with consumer electronics e-commerce and smart supply chain management operations. The Company’s ending customers include British Telecom, Micromax and about 15 to 20 other corporations across the world. For the year ended December 31, 2016, three customers individually accounted for more than 10% of the Company’s revenue. Four customers individually accounted for more than 10% of the Company’s net accounts receivables as of December 31, 2016, respectively. For the year ended December 31, 2017, two customers individually accounted for more than 10% of the Company’s third parties revenue. Three customers individually accounted for more than 10% of the Company’s net accounts receivables as of December 31, 2017, respectively. (c) Major Suppliers Legacy YOD business The Company relies on agreements with studio content partners to acquire video contents. A content partner that accounts for more than 10% of the Company’s cost of revenues is considered a major supplier. As of December 31, 2016, all licensed contents have been recognized as cost of revenues other than the ones that acquired from SSS in the amount of $17.7 million (note 13). For the year ended December 31, 2016, four suppliers which are Paramount, Disney, Universal and Twentieth Century Fox individually accounted for more than 10% of the Company’s legacy YOD business cost of revenues. Two suppliers which are Universal and Paramount individually accounted for 10% of the Company’s accrued legacy YOD business license fees as of December 31, 2016. Wecast Services The Company relies on agreements with consumer electronics manufactures. For the year ended December 31, 2016, two suppliers individually accounted for more than 10% of the Company’s cost of revenues. Two suppliers individually accounted for more than 10% of the Company’s accounts payable as of December 31, 2016. For the year ended December 31, 2017, five suppliers individually accounted for more than 10% of the Company’s cost of revenues. Two suppliers individually accounted for more than 10% of the Company’s accounts payable as of December 31, 2017. (d) Concentration of Credit Risks Financial instruments that potentially subject the Group to significant concentration of credit risk primarily consist of cash and accounts receivable. As of December 31, 2017 and 2016, the Company’s cash were held by financial institutions located in the PRC, Hong Kong, the United States and Singapore that management believes have acceptable credit. Accounts receivable are typically unsecured and are mainly derived from revenues from Company’s VOD content distribution partners, and smart sales products to customers. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances. (e) Foreign Currency Risks A majority of the Company’s operating transactions are denominated in RMB and a significant portion of the Company’s assets and liabilities is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to complete the remittance. Cash consist of cash on hand and demand deposits at banks, which are unrestricted as to withdrawal. Time deposits, which mature within one year as of the balance sheet date, represent interest-bearing certificates of deposit with an initial term of greater than three months when purchased. Time deposits which mature over one year as of the balance sheet date are included in non-current assets. Cash and time deposits maintained at banks consist of the following: December 31, 2017 2016 RMB denominated bank deposits with financial institutions in the PRC $ 311,894 $ 1,566,107 US dollar denominated bank deposits with financial institutions in the PRC $ 628,481 $ 670,951 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 17,508 $ 14,151 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 1,505,271 $ 1,402,842 US dollar denominated bank deposits with financial institutions in Singapore (“Singapore”) $ 1,033,769 $ - US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 3,698,704 $ 95,030 As of December 31, 2017 and December 31, 2016 deposits of $398,243 and $384,545 were insured, respectively. To limit exposure to credit risk relating to bank deposits, the Company primarily places bank deposits only with large financial institutions in the PRC, HK SAR, USA, Singapore and Cayman with acceptable credit rating. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2017 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |
Defined Contribution Plan | 20. Defined Contribution Plan For our U.S. employees, during 2011, the Company began sponsoring a 401(k) defined contribution plan ("401(k) Plan") that provides for a 100% employer matching contribution of the first 3% and a 50% employer matching contribution of each additional percent contributed by an employee up to 5% of each employee’s pay. Employees become fully vested in employer matching contributions after six months of employment. Company 401(k) matching contributions were approximately $13,173 and $4,000 for the years ended December 31, 2017 and 2016, respectively. Full time employees in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Company to make contributions based on certain percentages of the employees’ basic salaries. Other than such contributions, there is no further obligation under these plans. The total contribution for such PRC employee benefits was $439,227 and $571,476 for the years ended December 31, 2017 and 2016, respectively. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | 21. Segment Reporting The Company’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 Company. Please refer to Note (2) for more management’s segment consideration. Segment disclosures are on a performance basis consistent with internal management reporting. The Company does not allocate expenses below segment gross profit since these segments share the same executive team, office space, occupancy expenses, information technology infrastructures, human resources and finance department. The following tables summarized the Company’s revenue and cost generated from different revenue streams. 2017 2016 NET SALES TO EXTERNAL CUSTOMERS -Legacy YOD $ 794,273 $ 4,543,616 -Wecast Service 143,544,532 30,641,892 Net sales 144,338,805 35,185,508 GROSS PROFIT -Legacy YOD 31,659 109,356 -Wecast Service 7,118,793 (475,046 ) Gross profit 7,150,452 (365,690 ) December 31, December 31, 2017 2016 TOTAL ASSETS -Legacy YOD $ 27,141,163 $ 36,975,911 -Wecast Service 29,679,735 14,448,702 -Unallocated assets 11,270,378 4,321,677 -Intersegment elimination (5,051,660 ) - Total 63,039,616 55,746,290 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 22. Subsequent Event On January 12 and February 28, 2018, the Company enters into another two stock purchase agreements with certain existing DBOT shareholders to acquire their owned shares of common stock of DBOT in an aggregate amount of 1,000,000 shares. To acquire those shares, the Company agreed to issue in the aggregate amount of 640,000 SSC common stock. Same as the closing condition set forth in the first transaction in December 2017 which was disclosed in Note 9, the closing of this transaction shall occur within 30 days of the execution of this agreement and obtain necessary approval such as FINRA, and therefore the Company did not issue the shares and recorded it as investment yet as of this reporting date. On March 17, 2018, the Company entered into a subscription agreement (the “Subscription Agreement”) with GT Dollar Ptd. Ltd. (“GTD”) for a private placement of a total amount of $40.0 million. Pursuant to the terms of the Subscription Agreement, the Company (i) will issue and sell to GTD, an aggregate of 13,773,010 shares of the common stock of the Company, par value $0.001 per share (the “Common Stock”), for $1.82 per share, or a total purchase price of $25,066,878.20, and (ii) issue two convertible promissory notes (each a “Note” and together, the “Notes”) with a stated principal amount of $10 million and $4,933,121.80, respectively. GTD shall pay $30 million of the purchase price on or prior to March 31, 2018, in connection with the issuance of the 13,773,010 shares of Common Stock and the $4,933,121.80 Note, and the remaining $10 million on or prior to April 30, 2018, in connection with the issuance of the $10 million Note. The Subscription Agreement contains customary representations, warranties and covenants and a 9 month lock-up period for GTD from the date of the Subscription Agreement. The Notes bear interest at the rate of 0.56% per annum and matures December 31, 2019. In the event of default, the Notes will become immediately due and payable. Until receipt of necessary shareholder approvals for the transactions contemplated by these agreements, the Notes note may not be converted, to the extent that such conversion would result in GTD and its affiliates beneficially owning more than 19.9% of the Company’s outstanding shares of Common Stock. Once the necessary shareholder approval is received, the unpaid principal and interest on the Notes will automatically convert into shares of Common Stock at a conversion rate of $1.82. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | (a) Principles of Consolidation The consolidated financial statements include the financial statements of Seven Stars Cloud Group, Inc., its wholly-owned subsidiaries, its VIEs in which the Company is the primary beneficiary, and the subsidiary of its consolidated VIE. All material intercompany transactions and balances are eliminated upon consolidation. |
Basis of Presentation | (b) Basis of Presentation The Company prepares and presents its consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s consolidated financial statements as of December 31, 2016 have been prepared as if the Wecast Services and Wide Angle had been owned by the Company since November 10, 2016 presented and the Company’s consolidated financial statements as of December 31, 2016 has been retrospectively adjusted accordingly. |
Long term investments | (c) Long term investments Equity method investment Investments in entities where the Company can exercise significant influence, but not control, are accounted for using the equity method. Under the equity method, the investment is initially recorded at cost and adjusted for the Company’s share of undistributed earnings or losses of the investee. The Company’s share of losses is not recognized when the investment is reduced to zero since the Company does not guarantee the investees’ obligations nor is the Company committed to providing additional funding. Management evaluates impairment on the investments accounted for under the equity method of accounting based on performance and the financial position of the investee, as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financings, projected and historical financial performance, cash flow forecasts and financing needs. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and the impairment is determined to be other-than-temporary. Cost method investment Investment in entities over which the Company neither has significant influence nor control are accounted for using under the cost method. Under the cost method, the Company records the investment at cost and recognizes income for any dividends declared from distribution of investee’s earnings. The Company reviews the cost method investments for impairment whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable. We impair our cost method investment when we determine that there has been an “other-than temporary” decline in the investments fair value compared to its carrying value. The fair value of the investment would then become the new cost basis of the investment. There were no indicators of impairment in 2017. |
Use of Estimates | (d) Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities, at the date of the consolidated financial statements and during the reporting period. Actual results could differ from those estimates. The significant estimates include, but not limited to, the determination of estimated selling prices of multiple elements revenues contract, the expected revenue from licensed content, allowances for doubtful accounts, share-based compensation and equity based transactions with non-employees, determination of the estimated useful lives of intangible assets, impairment assessment of goodwill, intangible assets, and licensed content, determination of the fair value of financial instruments and valuation of deferred income taxes assets. These estimates may be adjusted as more current information becomes available, and any adjustment made could be significant. |
Foreign Currency Translation | (e) Foreign Currency Translation The Company uses the United States dollar (“$” or “USD”) as its reporting currency. The functional currency of Seven Stars Cloud Group, Inc., CB Cayman, YOD Hong Kong, M.Y. Products LLC, Amer and Seven Stars Energy is the USD while the functional currency of other subsidiaries and VIEs is either the Renminbi (“RMB”) or Hong Kong dollars (“HKD”). In the consolidated financial statements, the financial information of the entities which use RMB and HKD as their functional currency has been translated into USD. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at the historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component of other comprehensive loss in the statement of comprehensive loss. Transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated in the functional currency at the applicable rates of exchange in effect at the balance sheet date. The resulting exchange differences are recorded in the consolidated statements of operations. |
Cash | (f) Cash Cash consist of cash on hand and demand deposit as of the date of purchase of three months or less. The Company deposits its cash balances with a limited number of banks. |
Accounts Receivable, net | (g) Accounts Receivable, net Accounts receivable are recognized at invoiced amounts and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company reviews its allowance for doubtful accounts receivable on an ongoing basis. In establishing the required allowance, management considers any historical losses, the customer’s financial condition, the accounts receivable aging, and the customer’s payment patterns. After all attempts to collect a receivable have failed and the potential for recovery is remote, the receivable is written off against the allowance. |
Property and Equipment, net | (h) Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation. Expenditures for major renewals and improvements, which extend the original estimated economic useful lives of applicable assets, are capitalized. Expenditures for normal repairs and maintenance are charged to expense as incurred. The costs and related accumulated depreciation of assets sold or retired are removed from the accounts and any gain or loss thereon is recognized in the consolidated statement of operations. Depreciation is provided for on a straight-line basis over the estimated useful lives of the respective assets. The estimated useful life is 5 years for the furniture, 3 years for the electronic equipment, 5 to 10 years for the vehicles, 20 years for the office building and lesser of lease terms or the estimated useful lives of the assets for the leasehold improvements. |
Licensed Content | (i) Licensed Content The Company obtains content through content license agreements with studios and distributors. We recognize licensed content when the license fee and the specified content titles are known or reasonably determinable. Prepaid license fees are classified as an asset on the consolidated balance sheets as licensed content and accrued license fees payable are classified as a liability on the consolidated balance sheets. We amortize licensed content in cost of revenues over the contents contractual availability based on the expected revenue derived from the licensed content, beginning with the month of first availability, such that our revenues bear a representative amount of the cost of the licensed content. We review factors that impact the amortization of licensed content at each reporting date, including factors that may bear direct impact on expected revenue from specific content titles. Changes in our expected revenue from licensed content could have a significant impact on our amortization pattern. Management evaluates the recoverability of the licensed content whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. For the years ended December 31, 2017 and 2016, an impairment loss of nil and $496,467 was recognized in cost of revenue, respectively. |
Intangible Assets and Goodwill | (j) Intangible Assets and Goodwill Company accounts for intangible assets and goodwill, in accordance with ASC 350, Intangibles – Goodwill and Other. ASC 350 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be evaluated for impairment at least annually. ASC 350 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives and reviewed for impairment whenever events indicate the carrying amount may not be recoverable. In accordance with ASC 350, goodwill is allocated to reporting units, which are either the operating segment or one reporting level below the operating segment. On an annual basis, we review goodwill for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances makes it more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If we determine that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, goodwill is further tested for impairment by comparing the carrying value to the estimated fair value of its reporting units, determined using externally quoted prices (if available) or a discounted cash flow model and, when deemed necessary, a market approach. Application of goodwill impairment tests requires significant management judgment, including the identification of reporting units, assigning assets, liabilities and goodwill to reporting units and determination of fair value of each reporting unit. Judgment applied when performing the qualitative analysis includes consideration of macroeconomic, industry and market conditions, overall financial performance of the reporting unit, composition, personnel or strategy changes affecting the reporting unit and recoverability of asset groups within a reporting unit. Judgments applied when performing the quantitative analysis includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these judgments, estimates and assumptions could materially affect the determination of fair value for each reporting unit. |
Warrant Liabilities | (k) Warrant Liabilities We account for derivative instruments and embedded derivative instruments in accordance with ASC 815, Accounting for Derivative Instruments and Hedging Activities We also follow ASC 815-40 Contracts in Entity’s Own Equity |
Revenue Recognition | (l) Revenue Recognition When persuasive evidence of an arrangement exists, the sales price is fixed or determinable and collectability is reasonably assured, we recognize revenue as services are performed. For certain contracts that involve sub-licensing content within the specified license period, revenue is recognized in accordance with ASC Subtopic 926-605, Entertainment-Films - Revenue Recognition, whereby revenue is recognized upon delivery of films when the arrangement includes a nonrefundable minimum guarantee, delivery is complete and we have no substantive future obligations to provide future additional services. Payments received from customers for the performance of future services are recognized as deferred revenue, and subsequently recognized as revenue in the period that the service obligations are completed. In accordance with ASC 605-25, Revenue Recognition - Multiple Element Arrangements, contracts with multiple element deliverables are separated into individual units for accounting purposes when the unit determined to have standalone value to the customer. Since the contract price is for all deliverables, company allocated the arrangement consideration to all deliverables at the inception of the arrangement based on their relative selling price. Company uses (a) vendor-specific objective evidence of selling price, if it exists, or, (b) the management’s best estimate of the selling price for that deliverable to determine the relative selling price of each individual unit. Company also generates revenue from sales of goods. Sales orders are confirmed after negotiation on price between customers and us. Purchase orders are confirmed after careful selection of suppliers and negotiation on price. Company purchases finished goods from suppliers in accordance with sales orders from customers. Our suppliers then deliver goods to our customers directly. Company is required to bear the direct risk of damage to the goods that the direct default risk that cannot be delivered to the customer. When the delivery is completed, company recognizes revenue and the related cost at the same time. According to purchase orders with suppliers, company, as the owner of the goods, becomes the first responsible party for the goods. Revenue arrangements for consumer electronics is as follows: the Company signs a sales order with customers which designates the Company as principal to purchase and deliver goods to designated locations in Hong Kong. When the delivery is completed, the performance obligation is fulfilled. The price of each transaction is fixed to the sales order, and no variable consideration nor any consideration payable to the client or customer exists. The Company also has developed a TPaaS (Platform as a Service) system which went into operation in Q4 2017, however, no revenue was recognized in connection with this platform during Q4 2017. Within this platform, all industrial participants can place orders and complete transactions on their own, which allows customers to minimize transaction costs. The Company earns platform service fees through these automated transactions. In accordance with ASC 605-45, Revenue Recognition – Principal Agent Consideration, company accounts for revenue from sales of goods on a gross basis. Company is the primary obligor in the arrangements, as company has the ability to establish prices, and has discretion in selecting the independent suppliers and other third-party that will perform the delivery service, company is responsible for the defective products and company bears credit risk with customer payments. Accordingly, all such revenue billed to customers is classified as revenue and all corresponding payments to suppliers are classified as cost of revenues. The recognition of revenue involves certain judgments and changes in our assumptions, judgments or estimations may have a material impact on the amount and timing of our revenue recognition. |
Share-Based Compensation | (m) Share-Based Compensation The Company awards share options and other equity-based instruments to its employees, directors and consultants (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. The Company recognizes the compensation cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The amount of cost recognized is adjusted to reflect the expected forfeiture prior to vesting. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. The Company also awards stocks and warrants for service to consultants for service and accounts for these awards under ASC 505-50, Equity - Equity-Based Payments to Non-Employees |
Income Taxes | (n) Income Taxes The Company accounts for income taxes in accordance with the asset and liability method. Deferred taxes are recognized for the future tax consequences attributable to temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and income tax purposes using enacted rates expected to be in effect when such amounts are realized or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established, as needed to reduce the amount of deferred tax assets if it is considered more likely than not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. There were no such interest or penalty for the years ended December 31, 2017 and 2016. On December 22, 2017 the U.S. Tax Reform, which among other effects, reduces the U.S. federal corporate income tax rate to 21% from 34% (or 35% in certain cases) beginning in 2018, requires companies to pay a one-time transition tax on certain unrepatriated earnings from non-U.S. subsidiaries that is payable over eight years, makes the receipt of future non-U.S. sourced income of non-U.S. subsidiaries tax-free to U.S. companies and creates a new minimum tax on the earnings of non-U.S. subsidiaries relating to the parent’s deductions for payments to the subsidiaries. Our provisional estimate is that no tax will be due under this provision. We continue to gather information relating to this estimate. |
Net Loss Per Share Attributable to Seven Stars Cloud Shareholders | (o) Net Loss Per Share Attributable to Seven Stars Cloud Shareholders Net loss per share attributable to Seven Stars Cloud shareholders is computed in accordance with ASC 260, Earnings per Share. The two-class method is used for computing earnings per share. Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s convertible redeemable preferred shares are participating securities because the holders are entitled to receive dividends or distributions on an as converted basis. For the years presented herein, the computation of basic loss per share using the two-class method is not applicable as the Group is in a net loss position and net loss is not allocated to other participating securities, since these securities are not obligated to share the losses in accordance with the contractual terms. Basic net loss per share is computed using the weighted average number of ordinary shares outstanding during the period. Options and warrants are not considered outstanding in computation of basic earnings per share. Diluted net loss per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under treasury stock method. Potential ordinary shares include options and warrants to purchase ordinary shares, preferred shares and convertible promissory note, unless they were anti-dilutive. The computation of diluted net loss per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net loss per share. |
Reportable Segment | (p) Reportable Segment The Company’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 Company. In fiscal year 2016, the Company operated and reported its performance in one segment. However, starting from fiscal year 2017, since Company has acquired Wecast Services Limited and Wide Angle Group Limited in January (see note 5), the Company has operated two segments based on different clouds that major business resides in, including Legacy YOD segment and Wecast Service segment. Therefore, there are two reportable segments for the year ended December 31, 2017. The two reportable segments are: Legacy YOD - Provides premium content and integrated value-added service solutions for the delivery of VOD and paid video programming to digital cable providers, Internet Protocol Television (“IPTV”) providers. The core revenues are being generated from both minimum guarantee payments and revenue sharing arrangements with distribution partners as well as subscription or transactional fees from subscribers. Wecast Service - Wecast Services (which resides under the Product Sales Cloud) is currently primarily engaged with consumer electronics e-commerce, smart supply chain management operations and oil trading primarily operated in Singapore. |
Standards Issued and Not Yet Implemented | (q) Standards Issued and Not Yet Implemented In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). The new standard is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The standard will require lessees to report most leases as assets and liabilities on the balance sheet, while lessor accounting will remain substantially unchanged. The standard requires a modified retrospective transition approach for existing leases, whereby the new rules will be applied to the earliest year presented. We do not expect the new lease standard to have a material effect on our financial position, results of operations or cash flows. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, or ASU 2014-09, a standard that will supersede virtually all of the existing revenue recognition guidance in U.S. GAAP. The standard establishes a five-step model that will apply to revenue earned from a contract with a customer. Extensive disclosures will be required, including disaggregation of total revenue, information about performance obligations, changes in contract asset and liability account balances between periods and key judgments and estimates. The FASB has issued several amendments to the standard, including clarification on accounting for licenses of intellectual property and identifying performance obligations. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (the full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). We currently anticipate adopting the standard using the modified retrospective method. The new standard will be effective for us beginning January 1, 2018. We are undertaking a comprehensive approach to assess the impact of the guidance on our business by reviewing our current accounting policies and practices to identify any potential differences that may result from applying the new requirements to our consolidated financial statements. We do not anticipate that this standard will have a material impact to revenue recognition in both of our legacy YOD business and Wecast Service business. Especially for Wecast Service business, we will continue to recognize revenue as principal for these contracts at the point in time when the products are delivered and performance obligation is fulfilled. The new standard requires to disclose more information about revenue activities and related transactions including quantitative and qualitative information about performance obligations, significant judgements and estimates, contract assets and liabilities and disaggregation of revenue, which we are continuing to assess in the first quarter of 2018. We are also identifying and implementing changes to the Company’s business processes, systems and controls to support adoption of the new standard in 2018. We continue to make significant progress on our review of the standard. Our initial assessment may change as we continue to refine these assumptions. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)”. The pronouncement changes the impairment model for most financial assets, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. We do not expect a material impact to its consolidated financial statement upon adoption of this ASU. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective in the first quarter of 2018 and early adoption is permitted. Management is still evaluating the effect that this guidance will have on the consolidated financial statements and related disclosures. In January 2017, FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The update affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The update is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update provides a more robust framework to use in determining when a set of assets and activities is a business, and also provides more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. For public companies, the update is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The guidance should be applied prospectively upon its effective date. The effect of ASU 2017-01 on the consolidated financial statements will be dependent on any future acquisitions. |
VIE Structure and Arrangements
VIE Structure and Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Vie Structure And Arrangements [Abstract] | |
Schedule of consolidated financial statements | December 31, December 31, 2017 2016 ASSETS Current assets: Cash $ 3,898 $ 1,519,125 Accounts receivable, net - 1,260,529 Prepaid expenses 3,604 30,455 Other current assets 1,537 191,427 Intercompany receivables due from the Company’s subsidiaries (i) 2,494,505 150,725 Total current assets 2,503,544 3,152,261 Property and equipment, net - 196,677 Intangible assets, net - 2,570 Long-term investments 3,719,467 3,654,664 Other non-current assets - 442,782 Total assets $ 6,223,011 $ 7,448,954 LIABILITIES Current liabilities: Accounts payable $ - $ 5,817 Deferred revenue - 824,563 Accrued expenses - 268,074 Other current liabilities 41 394,314 Accrued license content fees - 1,236,661 Intercompany payables due to the Company’s subsidiaries (i) 3,601,454 14,752,338 Total current liabilities 3,601,495 17,481,767 Total liabilities $ 3,601,495 $ 17,481,767 2017 2016 Net revenue $ 794,273 $ 4,543,616 Net loss $ (4,356,188 ) $ (6,557,639 ) 2017 2016 Net cash used in operating activities $ (1,661,696 ) $ (2,497,637 ) Net cash used in investing activities $ (43,047 ) $ (2,896,492 ) Net cash provided by financing activities (i) $ 189,515 $ 6,555,377 (i) Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.2 million to SSF in 2017. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of accounts receivable | December 31, December 31, 2017 2016 Accounts receivable, gross $ 26,965,731 $ 12,350,947 Less: allowance for doubtful accounts (3,646 ) (2,828,796 ) Accounts receivable, net $ 26,962,085 $ 9,522,151 |
Schedule of movement in allowance for doubtful accounts receivable | December 31, December 31, Balance at the beginning of the year $ (2,828,796 ) $ - Additions charged to bad debt expense (145,512 ) (2,825,124 ) Write-off of bad debt allowance 89,851 - Disposal of Zhong Hai Shi Xun 2,880,811 - Acquisition of WAG - (3,672 ) Balance at the end of the year $ (3,646 ) $ (2,828,796 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | December 31, December 31, 2017 2016 Furniture and office equipment $ 301,006 $ 1,063,481 Vehicle 147,922 267,023 Office Building - 3,948,058 Leasehold improvements - 939,844 Total property and equipment 448,928 6,218,406 Less: accumulated depreciation (334,935 ) (1,254,681 ) Property and Equipment, net $ 113,993 $ 4,963,725 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of amortizing and indefinite lived intangible assets | December 31, 2017 December 31, 2016 Gross Accumulated Impairment Net Gross Accumulated Impairment Net Amortizing Intangible Assets Charter/ Cooperation agreements (iii) $ - $ - $ - $ - $ 2,755,821 $ (909,257 ) $ (1,846,564 ) $ - Software and licenses 214,210 (199,626 ) - 14,584 267,991 (241,932 ) - 26,059 Patent and trademark (iv) 92,965 (39,943 ) (53,022 ) - 92,965 (39,943 ) - 53,022 Website and mobile app development (ii) - - - - 593,193 (421,129 ) (172,064 ) - Workforce (i) - - - - 305,694 (76,422 ) - 229,272 Total amortizing intangible assets $ 307,175 (239,569 ) (53,022 ) 14,584 $ 4,015,664 $ (1,688,683 ) $ (2,018,628 ) $ 308,353 Indefinite lived intangible assets Website name 134,290 - - 134,290 134,290 - - 134,290 Patent (iv) 10,599 - (10,599 ) - 10,599 - - 10,599 Total intangible assets $ 452,064 (239,569 ) (63,621 ) 148,874 $ 4,160,553 $ (1,688,683 ) $ (2,018,628 ) $ 453,242 (i) On April 1, 2016, the Company entered into an agreement with Mr. Liu Changsheng, under which SSC agreed to pay Mr. Liu Changsheng cash consideration of $187,653 and 66,500 shares of restricted shares with a six-month restriction period and a fair value of $121,695 in exchange for a workforce of 10 personnel experienced in programing content mobile apps. All 10 personnel entered into three-year employment contracts with SSC effective April 1, 2016. The Company also acquired certain laptop and desktop computers with fair value of $3,655. According to the agreement, 30% of the cash consideration is due upon the signing of the agreement, 20% is due 2 months after the signing of the agreement and 50% is due 6 months after the signing of the agreement. All cash consideration has been paid. If any of 3 key staff, as defined, terminated their employment with SSC during the first 12 months of employment, SSC has the right to forfeit the unpaid cash consideration. In addition, Mr. Liu Changsheng would be required to pay a default penalty at minimal of $129,180. SSC has accounted for the transaction as an asset acquisition in which SSC mainly acquired a workforce, which is recognized as an intangible asset at cost. Subsequently, the workforce intangible is amortized over the employment term of three years. In September, 2017, after evaluating the cost and benefit, Company decided to terminate the service contract with this entire team and therefore Company recognize impairment in the amount of $152,847, and at the December 31, 2017, the Company already terminated the service, and disposed of this intangible assets from consolidated balance sheet. (ii) Considering a new mobile app has been developed to be put into market in October 2016, the Company determined that the future cash flows generated from the old mobile app was nil. In accordance with ASC 350, Intangibles - Goodwill and Other (iii) During the fourth quarter of 2016, the Company determined that the Charter/Cooperation agreements will not serve the business or generate future cash flow. As no future cash flows will be generated from the Charter/Cooperation agreements, the Company estimated the fair value of the Charter/Cooperation agreements to be nil as of December 31, 2016. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from Charter/Cooperation agreements of $1,846,000 was recognized in 2016 to write off the entire book value of the Charter/Cooperation agreements. In June, 2017, this intangible asset has been disposed of along with other net assets in Zhong Hai Shi Xun. (iv) During the second quarter of 2017, the Company determined that one of its subsidiaries in the US will not serve the non-core business or generate future cash flow. As no future cash flows will be generated from using the patent owned by this subsidiary, the Company estimated the fair value of those patent to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patent of $63,621 was recognized in 2017 to write off the entire book value of the patent. |
Schedule of amortization expense for the next five years | Amortization to be Years ending December 31, recognized 2018 $ 10,295 2019 4,289 Total amortization to be recognized $ 14,584 |
Long-term Investments (Tables)
Long-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of cost method investments | December 31, December 31, Topsgame (i) $ 3,365,969 $ 3,156,985 Frequency (ii) 3,000,000 3,000,000 DBOT (iii) 250,000 - Total $ 6,615,969 $ 6,156,985 (i) Investment in Topsgame On April 13, 2016, SSF entered into a Game Right Assignment Agreement with SSS for the acquisition of certain game IP rights (“Game IP Rights”) for approximately $2.7 million (RMB18 million) in cash. On April 15, 2016, SSF entered into a Capital Increase Agreement with Nanjing Tops Game Co., Ltd. (“Topsgame”) and its shareholders whereby SSF transferred the Game IP Rights acquired from SSS to Topsgame in exchange for 13% of Topsgame’s equity ownership. Topsgame is a PRC company that specializes in the independent development and operation of online, stand-alone and other games as well as the distribution of domestic and overseas games. The Company’s 13% ownership interest does not provide the Company with the right to nor does the Company have representation on the board of directors of Topsgame. The Company has recognized the cost of the investment in Topsgame, which is a private company with no readily determinable fair value, based on the acquisition cost of Game IP Rights of approximately $2.7 million and accounts for the investment by the cost method. On September 14, 2016, SSF increased its investment in Topsgame by RMB 3,900,000 (approximately $584,000) and maintained its 13% equity ownership of Topsgame. The investment continued to be accounted for using the cost method. The Company plans to sell investment in Topsgame, certain owned IP and investment in Frequency to one independent third party with consideration larger than its net book amount in 2018. The Company already signed the letter of intent with purchaser, and management believed that we can close the deal in 2018, along with one additional valuation report provided by qualified independent valuation firm, the Company did not make any impairment to either of these three long-lived assets as of December 31, 2017. (ii) Investment in Frequency In April 2016, the Company and Frequency Networks Inc. (“Frequency”) entered into a Series A Preferred Stock Purchase Agreement (the “SPA”) for the purchase of 8,566,271 shares of Series A Preferred Stock, Frequency (the “Frequency Preferred Stock”) for a total purchase price of $3 million. The 8,566,271 Series A Preferred Stock represent 9% ownership and voting interest on an as converted basis and does not provide the Company with the right to nor does the Company have representation on the board of directors of Frequency. The Frequency Preferred Stock is entitled to non-cumulative dividends at the rate of $0.02548 per share per annum, declared at the discretion of Frequency’s board of directors. The Frequency Preferred Stock is also convertible into shares of Frequency common stock at the Company’s election any time after issuance on a 1:1 basis, subject to certain adjustment. Each share of Frequency Preferred Stock also has a liquidation preference of $0.42467 per share, plus any declared but unpaid dividends. The Company has recognized the cost of the investment in Frequency, which is a private company with no readily determinable fair value, at its cost of $3 million and accounts for the investment by the cost method. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of our cost method investments, accordingly the fair value of our cost method investments are not estimated. (iii) Investment in DBOT In August, 2017, the Company made a strategic investment of US$250,000 in the Delaware Board of Trade Holdings, Inc. (“DBOT”) to acquire 187,970 common shares. DBOT is an approved and licensed FINRA- and SEC-regulated electronic trading platform with operations in Delaware. One of our subsidiaries is powered by DBOT’s platform, trading system and technology. The Company accounts for this investment using the cost method, as the Company owns less than 4% of the common shares and the Company has no significant influence over DBOT. On December 18, 2017, the Company enters into stock purchase agreement with certain existing DBOT shareholders to acquire their owned shares of common stock of DBOT in an aggregate amount of 2,543,546 shares. To acquire those shares, the Company agreed to issue in the aggregate amount of 1,627,869 SSC common stock. The closing of this transaction shall occur within 30 days of the execution of this agreement and obtain necessary approval such as FINRA, and therefore the Company did not issue the shares and recorded it as investment as of December 31, 2017. |
Schedule of long term investment under equity method | December 31, 2017 January 1, 2017 Capital increase Loss on investment Impairment loss Foreign currency translation adjustments December 31, 2017 Wecast Internet (i) 132,782 (35,612 ) (93,481 ) - 2,355 6,044 Hua Cheng (ii) 364,897 - (35,712 ) - 24,313 353,498 Shandong Media (iii) - - - - - - Total 497,679 (35,612 ) (129,193 ) - 26,668 359,542 (i) Investment in Wecast Internet In October 2016, the Company’s subsidiary, YOU On Demand (Asia) Ltd., invested RMB 1,000,000 (approximately $149,750) in Wecast Internet Limited (“Wecast Internet”) and held its 50% equity ownership. In 2017, Wecast Internet closed its 100% owned subsidiary and the Company received $35,612 previous capital investment, and expects to receive the remaining from Wecast Internet in 2018. (ii) Investment in Hua Cheng As of the years ended December 31, 2017 and 2016, the Company held 39% equity ownership in Hua Cheng, and accounted for the investment by the equity method. (iii) Investment in Shandong Media As of the years ended December 31 2017 and 2016, the Company held 30% equity ownership in Shandong Media, and accounts for the investment by the equity method. The investment was fully impaired as of December 31, 2017 and 2016. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assumptions for estimating fair value of warrant liabilities | December 31, 2016 Risk-free interest rate 0.70 % Expected volatility 55 % Expected term 0.67 year Expected dividend yield 0 % |
Schedule of assets and liabilities measured at fair value on a recurring basis | December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Liabilities Warrant liabilities (see Note14) $ - $ - $ 70,785 $ 70,785 |
Schedule of components effecting the change in fair value | Level 3 Assets and Liabilities For the Year Ended December 31, 2017 January 1, Settlements Change in December 31, Liabilities: Warrant liabilities (see Note 14) $ 70,785 $ (183,427 ) $ 112,642 $ - Level 3 Assets and Liabilities For the Year Ended December 31, 2016 Change in January 1, Fair Value December 31, 2016 Settlements gain 2016 Liabilities: Warrant liabilities (see Note14) $ 395,217 $ - $ (324,432 ) $ 70,785 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of share-based payments expense | December 31, December 31, 2017 2016 Employees and directors share-based payments $ 1,305,829 $ 319,718 |
Schedule of stock option activity | Options Weighted Average Exercise Weighted Average Remaining Contractual Aggregated Intrinsic Outstanding at January 1, 2017 2,101,428 $ 2.42 4.59 $ - Granted 733,200 4.34 Exercised (258,455 ) 1.83 Expired (89,731 ) 3.22 Forfeited (633,051 ) 2.81 Outstanding at December 31, 2017 1,853,391 $ 3.20 2.99 $ 0.02 Vested and expected to be vested as of December 31, 2017 1,853,391 $ 3.20 2.99 $ 0.02 Options exercisable at December 31, 2017 (vested) 1,662,591 $ 3.19 4.38 $ 0.03 |
Schedule of assumptions used to estimate the fair values of the share options | December 31, December 31, 2017 2016 Expected term 5.4 ~5.9 years 1.7 ~5.9 years Expected volatility 55% ~ 85 % 55% ~ 70 % Expected dividend yield 0 % 0 % Risk free interest rate 2.04% ~2.29 % 0.54% ~1.35 % |
Schedule of warrants outstanding and exercisable | 2017 2016 Number of Number of Warrants Warrants Outstanding and Outstanding and Exercise Expiration Warrants Outstanding Exercisable Exercisable Price Date 2012 August Financing Warrants (i) - 536,250 $ 1.50 08/30/17 2013 Broker Warrants (Series D Financing) - 228,571 $ 1.75 07/05/18 2013 Broker Warrants (Convertible Note) - 114,285 $ 1.75 11/04/18 2014 Broker Warrants (Series E Financing) 703,714 1,085,714 $ 1.75 01/31/19 2016 Warrants to SSS (Note 12) 1,818,182 1,818,182 $ 2.75 03/28/18 2,521,896 3,783,002 (i) The warrants are classified as derivative liabilities as disclosed in Note 11. |
Schedule of summary of restricted shares | Shares Weighted-average Restricted shares outstanding at January 1, 2017 228,550 $ 1.75 Granted 417,953 2.21 Forfeited (401,249 ) 2.02 Vested (135,668 ) 2.24 Restricted shares outstanding at December 31, 2017 109,586 1.92 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | 2017 2016 Revenue from crude oil sale (g) $ 18,973,054 $ - Licensed content cost (b) - 219,000 Interest expense on convertible note (a) 120,000 120,000 (a) $3.0 Million Convertible Note On May 10, 2012, the Executive Chairman and Principal Executive Officer, Mr. Shane McMahon, made a loan to the Company in the amount of $3,000,000. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000 (the “Note”) at a 4% interest rate computed on the basis of a 365-day year. Upon issuance, the conversion price of the Note was equal to the price per share paid for securities by investors in the most recent financing (as of the date of conversion) of equity or equity-linked securities of the Company. Effective on January 31, 2014, the Company and Mr. McMahon entered into Amendment No. 4 to the Note pursuant to which the Note is at Mr. McMahon’s option, payable on demand or convertible on demand into shares of Series E Preferred Stock of the Company (the “Series E Preferred Stock”) at a conversion price of $1.75, until December 31, 2015. As a result, in 2014, the Company recognized a beneficial conversion feature discount calculated as the difference between the Series E Preferred Stock at its intrinsic value, which was the fair value of the common stock at the commitment date for the Series E Preferred Stock investment and the effective conversion price. As such, we recognized a beneficial conversion feature of approximately $2,126,000 in 2014 which was reflected as interest expense and additional paid-in capital since the note was payable upon demand. Effective December 30, 2014, the Company and Mr. McMahon entered into Amendment No. 5 pursuant to which the maturity date of the Note was extended to December 31, 2016. The Note remains payable on demand or convertible on demand into shares of Series E Preferred Stock at a conversion price of $1.75 at Mr. McMahon’s option. On December 31, 2016, the Company and Mr. McMahon entered into an amendment pursuant to which the Note will be at Mr. McMahon’s option, payable on demand or convertible on demand into shares of the Company’s Series E Preferred Stock, provided that the Note will no longer be convertible into Series E Preferred Stock upon the conversion of the Series E Preferred stock owned by C Media into the Company’s Common Stock (pursuant to which all Series E Preferred Stock will be automatically converted) but then convertible only into Common Stock at a conversion price of $1.50, until December 31, 2018. On November 9, 2017, the Board of Directors approved Amendment No. 7 to $3.0 million Convertible Promissory Notes (“Note”) issued to Mr. Shane McMahon, our Vice Chairman, pursuant to which the maturity date of the Note was extended to December 31, 2019. The Note remains payable on demand or convertible on demand into Common Stock at a conversion price of $1.50. In November, 2017, the Company paid such interest in the amount of $407,863 to Mr. Shane McMahon, and the accumulated interest payable as of December 31, 2017 was $20,055. For the years ended December 31, 2017 and 2016, the Company recorded interest expense of $120,000 and $120,000 related to the Note. (b) Cost of Revenue Hua Cheng, in which the Company holds 39% of the equity shares, charged us licensed content fees of approximately nil and $219,000 for the years ended December 31, 2017 and 2016, respectively. (g) Crude Oil Trading In December, 2017, One of our crude oil transaction was sold to one entity of which our minority shareholder has significant influence upon. Even though the crude oil was eventually sold to independent third party, the Company has recorded this sale as one separate related party sale in its financial statement. As of December 31, 2017, invoice related to this transaction has been collected as payment term of this transaction is pre-payment for full invoice value on pre-payment due date one or two business days before the notice of readiness tendered. |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of component of loss per common share | 2017 2016 Net loss attributable to common stockholders $ (9,835,601 ) $ (26,407,974 ) Basic Basic weighted average common shares outstanding 61,182,209 35,998,001 Diluted Diluted weighted average common shares outstanding 61,182,209 35,998,001 Net loss per share: Basic $ (0.16 ) $ (0.73 ) Diluted $ (0.16 ) $ (0.73 ) |
Schedule of number of securities convertible into common shares | December 31, December 31, 2017 2016 Warrants 2,521,896 3,783,002 Options 2,162,977 2,101,428 Series A Preferred Stock 933,333 933,333 Series E Preferred Stock - 7,154,997 Convertible promissory note and interest 35,346,703 2,371,945 Total 40,964,909 16,344,705 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of loss before tax and provision for income tax benefit | 2017 2016 Loss before tax United States $ (8,461,323 ) $ (15,069,992 ) PRC/Hong Kong/Singapore (1,731,546 ) (12,966,714 ) (10,192,869 ) (28,036,706 ) Deferred tax benefit of net operating loss United States $ - $ - PRC/Hong Kong/Singapore - (330,124 ) - (330,124 ) Deferred tax benefit other than benefit of net operating loss United States - - PRC/Hong Kong - - Total income tax benefit $ - $ (330,124 ) |
Schedule of reconciliation of expected income tax | 2017 2016 U. S. statutory income tax rate 34.0 % 34.0 % Non-deductible expenses: Earn out shares award expense 0.0 % -16.6 % Waiver of intercompany loan related to ZHV disposal 14.7 % 0.0 % Others -2.9 % -3.3 % Non-deductible interest expenses -0.4 % -0.3 % Non-taxable change in fair value warrant liabilities -0.4 % 0.4 % Increase in valuation allowance -21.6 % -8.2 % Tax rate differential -23.4 % -3.3 % Others 0.0 % -1.5 % Effective income tax rate 0.0 % 1.2 % |
Schedule of components of deferred tax assets and liabilities | 2017 2016 U.S. NOL $ 6,152,242 $ 12,501,988 Foreign NOL 5,365,437 5,765,422 Accrued payroll and expense 132,812 226,950 Nonqualified options 760,213 576,975 Provision for doubtful accounts - 412,102 Impairment of licensed content - 124,810 Others $ 30,040 $ 31,120 Total deferred tax assets 12,440,744 19,639,367 Less: valuation allowance (12,440,744 ) (19,639,367 ) |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of operating lease commitment | Leased Property Year ending December 31, Costs 2018 $ 733,439 2019 185,444 2020 189,933 Thereafter 94,967 Total $ 1,203,783 |
Concentration, Credit and Oth42
Concentration, Credit and Other Risks (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Schedule of demand deposits | December 31, 2017 2016 RMB denominated bank deposits with financial institutions in the PRC $ 311,894 $ 1,566,107 US dollar denominated bank deposits with financial institutions in the PRC $ 628,481 $ 670,951 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 17,508 $ 14,151 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 1,505,271 $ 1,402,842 US dollar denominated bank deposits with financial institutions in Singapore (“Singapore”) $ 1,033,769 $ - US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 3,698,704 $ 95,030 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Company's revenue and cost generated from different revenue streams | 2017 2016 NET SALES TO EXTERNAL CUSTOMERS -Legacy YOD $ 794,273 $ 4,543,616 -Wecast Service 143,544,532 30,641,892 Net sales 144,338,805 35,185,508 GROSS PROFIT -Legacy YOD 31,659 109,356 -Wecast Service 7,118,793 (475,046 ) Gross profit 7,150,452 (365,690 ) December 31, December 31, 2017 2016 TOTAL ASSETS -Legacy YOD $ 27,141,163 $ 36,975,911 -Wecast Service 29,679,735 14,448,702 -Unallocated assets 11,270,378 4,321,677 -Intersegment elimination (5,051,660 ) - Total 63,039,616 55,746,290 |
Organization and Principal Ac44
Organization and Principal Activities (Detail Textuals) | Jan. 31, 2017 |
Wide Angle Group Limited | |
Organization And Principal Activities [Line Items] | |
Percentage of ownership of shares to be purchase | 55.00% |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Detail Textuals) | 12 Months Ended | ||
Dec. 31, 2017Segment | Dec. 31, 2016USD ($)Segment | ||
Summary Of Significant Accounting Policies [Line Items] | |||
Impairment loss recognized from intangible assets | $ | [1] | $ 496,467 | |
Number of operating business segment | 1 | ||
Number of reportable segments | 2 | ||
U. S. statutory income tax rate | 34.00% | 34.00% | |
Corporate income tax rate effective in 2018 | 21.00% | ||
Furniture | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and Equipment estimated useful life | 5 years | ||
Electronic equipment | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and Equipment estimated useful life | 3 years | ||
Vehicle | Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and Equipment estimated useful life | 5 years | ||
Vehicle | Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and Equipment estimated useful life | 10 years | ||
Office building | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and Equipment estimated useful life | 20 years | ||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Going Concern and Management'46
Going Concern and Management's Plans (Detail Textuals) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | [1] | |
Going Concern And Managements Plans [Abstract] | |||
Loss from operations | $ (9,781,543) | $ (28,887,808) | |
Net loss | (10,192,869) | (28,500,965) | |
Cash used in operations | (9,972,693) | (9,426,940) | |
Accumulated deficit | $ (125,865,391) | $ (115,669,268) | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Going Concern and Management'47
Going Concern and Management's Plans (Detail Textuals 1) - USD ($) | Nov. 11, 2016 | Aug. 12, 2016 | Aug. 11, 2016 | Jul. 06, 2016 | Oct. 23, 2017 | May 19, 2017 | Nov. 17, 2016 | Jul. 19, 2016 | Mar. 28, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Going Concern And Managements Plans [Line Items] | |||||||||||
Number of shares issued for common stock financing and purchase price | $ 10,000,000 | $ 11,975,590 | $ 10,000,000 | ||||||||
Securities Purchase Agreement | Hong Kong Guo Yuan Group Capital Holdings Limited | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Number of common stock issued | 5,494,505 | ||||||||||
Shares issued, price per share (in dollars per share) | $ 1.82 | ||||||||||
Number of shares issued for common stock financing and purchase price | $ 10,000,000 | ||||||||||
Common Stock Purchase Agreement | Seven Star Works Co. Ltd. ("SSW") | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Number of common stock issued | 2,272,727 | ||||||||||
Shares issued, price per share (in dollars per share) | $ 1.76 | ||||||||||
Number of shares issued for common stock financing and purchase price | $ 4,000,000 | $ 4,000,000 | |||||||||
Common Stock Purchase Agreement | Harvest Alternative Investment Opportunities SPC ("Harvest") | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Number of common stock issued | 2,272,727 | ||||||||||
Shares issued, price per share (in dollars per share) | $ 1.76 | ||||||||||
Number of shares issued for common stock financing and purchase price | $ 4,000,000 | $ 4,000,000 | |||||||||
Common Stock Purchase Agreement | Sun Seven Stars Hong Kong Cultural Development Limited ("SSSHKCD") | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Number of common stock issued | 1,136,365 | ||||||||||
Shares issued, price per share (in dollars per share) | $ 1.76 | ||||||||||
Number of shares issued for common stock financing and purchase price | $ 2,000,000 | $ 2,000,000 | |||||||||
Common Stock Purchase Agreement | Investors, officers & directors and affiliates | |||||||||||
Going Concern And Managements Plans [Line Items] | |||||||||||
Number of common stock issued | 727,273 | ||||||||||
Shares issued, price per share (in dollars per share) | $ 2.75 | ||||||||||
Number of shares issued for common stock financing and purchase price | $ 2,000,000 |
VIE Structure and Arrangement48
VIE Structure and Arrangements (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Current assets: | |||||
Cash | $ 7,205,096 | $ 3,761,814 | $ 3,768,897 | ||
Accounts receivable, net | 26,962,085 | 9,522,151 | [1] | ||
Prepaid expenses | 2,202,728 | 375,944 | [1] | ||
Other current assets | 2,256,727 | 3,581,822 | [1] | ||
Total current assets | 55,801,238 | 19,319,577 | [1] | ||
Property and equipment, net | 113,993 | 4,963,725 | [1] | ||
Intangible assets, net | 148,874 | 453,242 | [1] | ||
Long-term investments | 6,975,511 | 6,654,664 | [1] | ||
Other non-current assets | [1] | 112,643 | |||
Total assets | 63,039,616 | 55,746,290 | [1] | ||
Current liabilities: | |||||
Accounts payable | 26,829,593 | 13,341,680 | [1] | ||
Deferred revenue | 222,350 | 1,350,054 | [1] | ||
Accrued expenses | 174,177 | 708,987 | |||
Other current liabilities | 625,942 | 934,480 | [1] | ||
Accrued license content fees | [1] | 1,236,661 | |||
Total current liabilities | 31,655,009 | 24,015,354 | [1] | ||
Total liabilities | 31,655,009 | 24,015,354 | [1] | ||
VIE | |||||
Current assets: | |||||
Cash | 3,898 | 1,519,125 | |||
Accounts receivable, net | 1,260,529 | ||||
Prepaid expenses | 3,604 | 30,455 | |||
Other current assets | 1,537 | 191,427 | |||
Intercompany receivables due from the Company's subsidiaries | [2] | 2,494,505 | 150,725 | ||
Total current assets | 2,503,544 | 3,152,261 | |||
Property and equipment, net | 196,677 | ||||
Intangible assets, net | 2,570 | ||||
Long-term investments | 3,719,467 | 3,654,664 | |||
Other non-current assets | 442,782 | ||||
Total assets | 6,223,011 | 7,448,954 | |||
Current liabilities: | |||||
Accounts payable | 5,817 | ||||
Deferred revenue | 824,563 | ||||
Accrued expenses | 268,074 | ||||
Other current liabilities | 41 | 394,314 | |||
Accrued license content fees | 1,236,661 | ||||
Intercompany payables due to the Company's subsidiaries | [2] | 3,601,454 | 14,752,338 | ||
Total current liabilities | 3,601,495 | 17,481,767 | |||
Total liabilities | $ 3,601,495 | $ 17,481,767 | |||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") | ||||
[2] | Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.2 million to SSF in 2017. |
VIE Structure and Arrangement49
VIE Structure and Arrangements (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Variable Interest Entity [Line Items] | |||
Net revenue | $ 144,338,805 | $ 35,185,508 | [1] |
Net loss | (9,835,601) | (26,407,974) | [1] |
VIE | |||
Variable Interest Entity [Line Items] | |||
Net revenue | 794,273 | 4,543,616 | |
Net loss | $ (4,356,188) | $ (6,557,639) | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
VIE Structure and Arrangement50
VIE Structure and Arrangements (Details 2) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Variable Interest Entity [Line Items] | ||||
Net cash used in operating activities | $ (9,972,693) | $ (9,426,940) | [1] | |
Net cash used in investing activities | (510,134) | (10,197,379) | [1] | |
Net cash provided by financing activities | 13,864,700 | 19,705,110 | [1] | |
VIE | ||||
Variable Interest Entity [Line Items] | ||||
Net cash used in operating activities | (1,661,696) | (2,497,637) | ||
Net cash used in investing activities | (43,047) | (2,896,492) | ||
Net cash provided by financing activities | [2] | $ 189,515 | $ 6,555,377 | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") | |||
[2] | Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.2 million to SSF in 2017. |
VIE Structure and Arrangement51
VIE Structure and Arrangements (Detail Textuals) ¥ in Millions, $ in Millions | Apr. 05, 2016CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Apr. 06, 2016 | Jan. 31, 2016USD ($) | Jan. 31, 2016CNY (¥) |
SSF | ||||||
Variable Interest Entity [Line Items] | ||||||
Capital injection to SSF | $ | $ 0.2 | |||||
SSF | Lan Yang | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage of variable interest entity | 99.00% | |||||
SSF | Yun Zhu | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage of variable interest entity | 1.00% | |||||
Contractual agreements | Sinotop Beijing | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage rights to the economic benefits | 100.00% | 100.00% | ||||
Contractual agreements | Sinotop Beijing | YOD WFOE | ||||||
Variable Interest Entity [Line Items] | ||||||
Registered capital | 1.6 | ¥ 10.6 | ||||
Contractual agreements | SSF | YOD WFOE | ||||||
Variable Interest Entity [Line Items] | ||||||
Registered capital | $ 4.2 | ¥ 27.6 | $ 7.5 | ¥ 50 | ||
Technical service agreement | Sinotop Beijing | YOD WFOE | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage of service fee received | 30.00% | 30.00% | ||||
Technical service agreement | SSF | YOD WFOE | Minimum | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage of service fee received | 20.00% | |||||
Technical service agreement | SSF | YOD WFOE | Maximum | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage of service fee received | 30.00% | |||||
Management services agreement | Sinotop Beijing | YOD Hong Kong | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage of service fee received | 100.00% | 100.00% | ||||
Term of agreement | 20 years | |||||
Management services agreement | SSF | YOD Hong Kong | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage of service fee received | 100.00% | |||||
Loan Agreement | YOD WFOE | ||||||
Variable Interest Entity [Line Items] | ||||||
Loans payable | ¥ 19.8 | |||||
Loan Agreement | Nominee Shareholders | ||||||
Variable Interest Entity [Line Items] | ||||||
Loans payable | ¥ 0.2 | |||||
Loan Agreement | SSF | Lan Yang | ||||||
Variable Interest Entity [Line Items] | ||||||
Registered capital | $ 4.2 | ¥ 27.6 | ||||
Loans payable | $ 4.2 | ¥ 27.6 |
Acquisition (Detail Textuals)
Acquisition (Detail Textuals) - USD ($) | 1 Months Ended | ||
Jan. 30, 2017 | Dec. 31, 2017 | Jan. 31, 2017 | |
Business Acquisition [Line Items] | |||
Principal amount of Promissory Note (SVG Note) | $ 50,000,000 | ||
Reduction to additional paid in capital due to SVG note | $ 24,300,000 | ||
Sun Video Group HK Limited | BT Capital Global Limited | |||
Business Acquisition [Line Items] | |||
Cash consideration for exchange | $ 800,000 | ||
Principal amount of Promissory Note (SVG Note) | $ 24,300,000 | ||
Conversion price of note convertible | $ 1.50 | ||
Expected revenue to generate | $ 250,000,000 | ||
Expected profit performance guarantee | 15,000,000 | ||
Cumulative threshold limit of net income achieve within 3 years | $ 50,000,000 | ||
Percentage of cumulative net income payment | 50.00% | ||
Wide Angle Group Limited | |||
Business Acquisition [Line Items] | |||
Percentage of ownership of shares to be purchase | 55.00% | ||
Wide Angle Group Limited | BT Capital Global Limited | |||
Business Acquisition [Line Items] | |||
Percentage of ownership of shares to be purchase | 55.00% |
Acquisition (Detail Textuals 1)
Acquisition (Detail Textuals 1) - Tiger Sports Media Limited - Securities Purchase Agreement - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Dec. 07, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||
Percentage of ownership interest acquired | 20.00% | |
Total purchase price paid | $ 9.8 | |
Cash paid to acquire entity | 2 | |
Value of capital stock issued | $ 7.8 | |
Share price of capital stock issued | $ 2.60 | |
Number of common stock issued | 3 | |
Cash refund to entity, if closing conditions not satisfied | $ 2 | |
Notice period for cash refund to entity | 15 days | |
Prepaid Expenses | ||
Business Acquisition [Line Items] | ||
Cash paid to acquire entity | $ 2 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Receivables [Abstract] | |||
Accounts receivable, gross: | $ 26,965,731 | $ 12,350,947 | |
Less: allowance for doubtful accounts | (3,646) | (2,828,796) | |
Accounts receivable, net | $ 26,962,085 | $ 9,522,151 | [1] |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Accounts Receivable (Details 1)
Accounts Receivable (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at the beginning of the year | $ (2,828,796) | $ 0 |
Additions charged to bad debt expense | (145,512) | (2,825,124) |
Write-off of bad debt allowance | (89,851) | 0 |
Disposal of Zhong Hai Shi Xun | 2,880,811 | 0 |
Acquisition of WAG | 0 | (3,672) |
Balance at the end of the year | $ (3,646) | $ (2,828,796) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 448,928 | $ 6,218,406 | |
Less: accumulated depreciation | (334,935) | (1,254,681) | |
Property and Equipment, net | 113,993 | 4,963,725 | [1] |
Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 301,006 | 1,063,481 | |
Vehicle | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 147,922 | 267,023 | |
Office building | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 0 | 3,948,058 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 0 | $ 939,844 | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Property and Equipment (Detail
Property and Equipment (Detail Textuals) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating expense | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 219,705 | $ 194,174 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | ||
Amortizing Intangible Assets | ||||
Gross Carry Amount | $ 307,175 | $ 4,015,664 | ||
Accumulated Amortization | (239,569) | (1,688,683) | ||
Impairment Loss | (53,022) | (2,018,628) | ||
Net Balance | 14,584 | 308,353 | ||
Total intangible assets | ||||
Gross Carry Amount | 452,064 | 4,160,553 | ||
Accumulated Amortization | (239,569) | (1,688,683) | ||
Impairment Loss | (63,621) | (2,018,628) | ||
Net Balance | 148,874 | 453,242 | [1] | |
Website name | ||||
Indefinite lived intangible assets | ||||
Gross Carry Amount | 134,290 | 134,290 | ||
Accumulated Amortization | 0 | 0 | ||
Impairment Loss | 0 | 0 | ||
Net Balance | 134,290 | 134,290 | ||
Patent | ||||
Indefinite lived intangible assets | ||||
Gross Carry Amount | [2] | 10,599 | 10,599 | |
Accumulated Amortization | [2] | 0 | 0 | |
Impairment Loss | [2] | (10,599) | 0 | |
Net Balance | [2] | 0 | 10,599 | |
Charter/ Cooperation agreements | ||||
Amortizing Intangible Assets | ||||
Gross Carry Amount | [3] | 0 | 2,755,821 | |
Accumulated Amortization | [3] | 0 | (909,257) | |
Impairment Loss | [3] | 0 | (1,846,564) | |
Net Balance | [3] | 0 | 0 | |
Software and licenses | ||||
Amortizing Intangible Assets | ||||
Gross Carry Amount | 214,210 | 267,991 | ||
Accumulated Amortization | (199,626) | (241,932) | ||
Impairment Loss | 0 | 0 | ||
Net Balance | 14,584 | 26,059 | ||
Patent and trademark | ||||
Amortizing Intangible Assets | ||||
Gross Carry Amount | [2] | 92,965 | 92,965 | |
Accumulated Amortization | [2] | (39,943) | (39,943) | |
Impairment Loss | [2] | (53,022) | 0 | |
Net Balance | [2] | 0 | 53,022 | |
Website and mobile app development | ||||
Amortizing Intangible Assets | ||||
Gross Carry Amount | [4] | 0 | 593,193 | |
Accumulated Amortization | [4] | 0 | (421,129) | |
Impairment Loss | [4] | 0 | (172,064) | |
Net Balance | [4] | 0 | 0 | |
Workforce | ||||
Amortizing Intangible Assets | ||||
Gross Carry Amount | [5] | 0 | 305,694 | |
Accumulated Amortization | [5] | 0 | (76,422) | |
Impairment Loss | [5] | 0 | 0 | |
Net Balance | [5] | $ 0 | $ 229,272 | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") | |||
[2] | During the second quarter of 2017, the Company determined that one of its subsidiaries in the US will not serve the non-core business or generate future cash flow. As no future cash flows will be generated from using the patent owned by this subsidiary, the Company estimated the fair value of those patent to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patent of $63,621 was recognized in 2017 to write off the entire book value of the patent. | |||
[3] | During the fourth quarter of 2016, the Company determined that the Charter/Cooperation agreements will not serve the business or generate future cash flow. As no future cash flows will be generated from the Charter/Cooperation agreements, the Company estimated the fair value of the Charter/Cooperation agreements to be nil as of December 31, 2016. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from Charter/Cooperation agreements of $1,846,000 was recognized in 2016 to write off the entire book value of the Charter/Cooperation agreements. In June, 2017, this intangible asset has been disposed of along with other net assets in Zhong Hai Shi Xun. | |||
[4] | Considering a new mobile app has been developed to be put into market in October 2016, the Company determined that the future cash flows generated from the old mobile app was nil. In accordance with ASC 350, Intangibles - Goodwill and Other, recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. The Company estimated the fair value of this intangible asset to be nil as of December 31, 2016. Fair value was determined using unobservable (Level 3) inputs. In June, 2017, this intangible asset has been disposed of along with other net assets in Zhong Hai Shi Xun. | |||
[5] | On April 1, 2016, the Company entered into an agreement with Mr. Liu Changsheng, under which SSC agreed to pay Mr. Liu Changsheng cash consideration of $187,653 and 66,500 shares of restricted shares with a six-month restriction period and a fair value of $121,695 in exchange for a workforce of 10 personnel experienced in programing content mobile apps. All 10 personnel entered into three-year employment contracts with SSC effective April 1, 2016. The Company also acquired certain laptop and desktop computers with fair value of $3,655. According to the agreement, 30% of the cash consideration is due upon the signing of the agreement, 20% is due 2 months after the signing of the agreement and 50% is due 6 months after the signing of the agreement. All cash consideration has been paid. If any of 3 key staff, as defined, terminated their employment with SSC during the first 12 months of employment, SSC has the right to forfeit the unpaid cash consideration. In addition, Mr. Liu Changsheng would be required to pay a default penalty at minimal of $129,180. SSC has accounted for the transaction as an asset acquisition in which SSC mainly acquired a workforce, which is recognized as an intangible asset at cost. Subsequently, the workforce intangible is amortized over the employment term of three years. |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 10,295 | |
2,019 | 4,289 | |
Net Balance | $ 14,584 | $ 308,353 |
Intangible Assets (Detail Textu
Intangible Assets (Detail Textuals) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Apr. 01, 2016USD ($)Personnelshares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |||
Intangible Assets [Line Items] | ||||||
Cash consideration | [1] | $ 2,992,072 | ||||
Restricted Shares granted in connection with acquisition of intangible | 121,695 | |||||
Impairment of other intangible assets (Note 8) | $ 216,468 | 2,018,628 | [1] | |||
Impairment loss recognized from intangible assets | [1] | 496,467 | ||||
Impairment Loss | $ (63,621) | (2,018,628) | ||||
Charter/ Cooperation agreements | ||||||
Intangible Assets [Line Items] | ||||||
Impairment loss recognized from intangible assets | $ 1,846,000 | |||||
Mr. Liu Changsheng | Workforce | ||||||
Intangible Assets [Line Items] | ||||||
Cash consideration | $ 187,653 | |||||
Restricted shares granted in connection with acquisition of intangible assets (in shares) | shares | 66,500 | |||||
Restricted Shares granted in connection with acquisition of intangible | $ 121,695 | |||||
Restriction period for restricted shares | 6 months | |||||
Fair value of intangible assets | $ 3,655 | |||||
Number Of Personnel | Personnel | 10 | |||||
Cash consideration due after signing of agreement, percentage | 30.00% | |||||
Cash consideration due in 2 months, percentage | 20.00% | |||||
Cash consideration due in 6 months, percentage | 50.00% | |||||
Payment of default penalty | $ 129,180 | |||||
Impairment of other intangible assets (Note 8) | $ 152,847 | |||||
Intangible assets amortized period | 3 years | |||||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Long-term Investments (Details)
Long-term Investments (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Cost method investment | $ 6,615,969 | $ 6,156,985 | |
Topgame | |||
Debt Instrument [Line Items] | |||
Cost method investment | [1] | 3,365,969 | 3,156,985 |
Frequency | |||
Debt Instrument [Line Items] | |||
Cost method investment | [2] | 3,000,000 | 3,000,000 |
DBOT | |||
Debt Instrument [Line Items] | |||
Cost method investment | [3] | $ 250,000 | $ 0 |
[1] | Investment in Topgame On April 13, 2016, SSF entered into a Game Right Assignment Agreement with SSS for the acquisition of certain game IP rights ("Game IP Rights") for approximately $2.7 million (RMB18 million) in cash. On April 15, 2016, SSF entered into a Capital Increase Agreement with Nanjing Tops Game Co., Ltd. ("Topsgame") and its shareholders whereby SSF transferred the Game IP Rights acquired from SSS to Topsgame in exchange for 13% of Topsgame's equity ownership. Topsgame is a PRC company that specializes in the independent development and operation of online, stand-alone and other games as well as the distribution of domestic and overseas games. The Company's 13% ownership interest does not provide the Company with the right to nor does the Company have representation on the board of directors of Topsgame. The Company has recognized the cost of the investment in Topsgame, which is a private company with no readily determinable fair value, based on the acquisition cost of Game IP Rights of approximately $2.7 million and accounts for the investment by the cost method. On September 14, 2016, SSF increased its investment in Topsgame by RMB 3,900,000 (approximately $584,000) and maintained its 13% equity ownership of Topsgame. The investment continued to be accounted for using the cost method. The Company plans to sell investment in Topgame. | ||
[2] | Investment in Frequency In April 2016, the Company and Frequency Networks Inc. ("Frequency") entered into a Series A Preferred Stock Purchase Agreement (the "SPA") for the purchase of 8,566,271 shares of Series A Preferred Stock, Frequency (the "Frequency Preferred Stock") for a total purchase price of $3 million. The 8,566,271 Series A Preferred Stock represent 9% ownership and voting interest on an as converted basis and does not provide the Company with the right to nor does the Company have representation on the board of directors of Frequency. The Frequency Preferred Stock is entitled to non-cumulative dividends at the rate of $0.02548 per share per annum, declared at the discretion of Frequency's board of directors. The Frequency Preferred Stock is also convertible into shares of Frequency common stock at the Company's election any time after issuance on a 1:1 basis, subject to certain adjustment. Each share of Frequency Preferred Stock also has a liquidation preference of $0.42467 per share, plus any declared but unpaid dividends. The Company has recognized the cost of the investment in Frequency, which is a private company with no readily determinable fair value, at its cost of $3 million and accounts for the investment by the cost method. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of our cost method investments, accordingly the fair value of our cost method investments are not estimated. | ||
[3] | Investment in DBOT In August, 2017, the Company made a strategic investment of US$250,000 in the Delaware Board of Trade Holdings, Inc. ("DBOT") to acquire 187,970 common shares. DBOT is an approved and licensed FINRA- and SEC-regulated electronic trading platform with operations in Delaware. One of our subsidiaries is powered by DBOT's platform, trading system and technology. The Company accounts for this investment using the cost method, as the Company owns less than 4% of the common shares and the Company has no significant influence over DBOT. On December 18, 2017, the Company enters into stock purchase agreement with certain existing DBOT shareholders to acquire their owned shares of common stock of DBOT in an aggregate amount of 2,543,546 shares. To acquire those shares, the Company agreed to issue in the aggregate amount of 1,627,869 SSC common stock. The closing of this transaction shall occur within 30 days of the execution of this agreement, and therefore the Company did not issue the shares and recorded it as investment as of December 31, 2017. |
Long-term Investments (Details
Long-term Investments (Details 1) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2016USD ($) | Oct. 31, 2016CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |||
Schedule Of Equity Method Investment [Roll Forward] | ||||||
Beginning balance | $ 497,679 | |||||
Capital increase | (35,612) | |||||
Loss on investment | (129,193) | |||||
Impairment of equity method investments | [1] | $ (38,448) | ||||
Foreign currency translation adjustments | 26,668 | |||||
Ending balance | 359,542 | 497,679 | ||||
Wecast Internet | ||||||
Schedule Of Equity Method Investment [Roll Forward] | ||||||
Beginning balance | [2] | 132,782 | ||||
Capital increase | $ 149,750 | ¥ 1,000,000 | (35,612) | [2] | ||
Loss on investment | [2] | (93,481) | ||||
Impairment of equity method investments | [2] | 0 | ||||
Foreign currency translation adjustments | [2] | 2,355 | ||||
Ending balance | [2] | 6,044 | 132,782 | |||
Hua Cheng | ||||||
Schedule Of Equity Method Investment [Roll Forward] | ||||||
Beginning balance | [3] | 364,897 | ||||
Capital increase | [3] | 0 | ||||
Loss on investment | [3] | (35,712) | ||||
Impairment of equity method investments | [3] | 0 | ||||
Foreign currency translation adjustments | [3] | 24,313 | ||||
Ending balance | [3] | 353,498 | 364,897 | |||
Shandong Media | ||||||
Schedule Of Equity Method Investment [Roll Forward] | ||||||
Beginning balance | [4] | 0 | ||||
Capital increase | [4] | 0 | ||||
Loss on investment | [4] | 0 | ||||
Impairment of equity method investments | [4] | 0 | ||||
Foreign currency translation adjustments | [4] | 0 | ||||
Ending balance | [4] | $ 0 | $ 0 | |||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") | |||||
[2] | Investment in Wecast Internet In October 2016, the Company's subsidiary, YOU On Demand (Asia) Ltd., invested RMB 1,000,000 (approximately $149,750) in Wecast Internet Limited ("Wecast Internet") and held its 50% equity ownership. In 2017, Wecast Internet closed its 100% owned subsidiary and the Company received $35,612 previous capital investment, and expects to receive the remaining from Wecast Internet in 2018. | |||||
[3] | Investment in Hua Cheng As of the years ended December 31, 2017 and 2016, the Company held 39% equity ownership in Hua Cheng, and accounted for the investment by the equity method. | |||||
[4] | Investment in Shandong Media As of the years ended December 31 2017 and 2016, the Company held 30% equity ownership in Shandong Media, and accounts for the investment by the equity method. The investment was fully impaired as of December 31, 2017 and 2016. |
Long-term Investments (Detail T
Long-term Investments (Detail Textuals) | Sep. 14, 2016USD ($) | Sep. 14, 2016CNY (¥) | Dec. 18, 2017USD ($)shares | Aug. 31, 2017USD ($)shares | Oct. 31, 2016USD ($) | Oct. 31, 2016CNY (¥) | Apr. 30, 2016USD ($)$ / sharesshares | Mar. 28, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Apr. 15, 2016 | Apr. 13, 2016USD ($) | Apr. 13, 2016CNY (¥) | |||
Debt Instrument [Line Items] | ||||||||||||||||
Acquisition of game IP rights in cash paid | $ 6,615,969 | $ 6,156,985 | ||||||||||||||
Common stock issuance | $ 10,000,000 | 11,975,590 | 10,000,000 | |||||||||||||
Long-term investments | 6,975,511 | 6,654,664 | [1] | |||||||||||||
Increase in investment | $ (35,612) | |||||||||||||||
Impairment of equity method investments | [1] | $ 38,448 | ||||||||||||||
Shandong Media | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of equity ownership | 30.00% | 30.00% | ||||||||||||||
Increase in investment | [2] | $ 0 | ||||||||||||||
Impairment of equity method investments | [2] | $ 0 | ||||||||||||||
Hua Cheng | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of equity ownership | 39.00% | 39.00% | ||||||||||||||
Increase in investment | [3] | $ 0 | ||||||||||||||
Impairment of equity method investments | [3] | 0 | ||||||||||||||
Wecast Internet Limited ("Wecast Internet") | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of equity ownership | 50.00% | 50.00% | ||||||||||||||
Increase in investment | $ 149,750 | ¥ 1,000,000 | (35,612) | [4] | ||||||||||||
Impairment of equity method investments | [4] | $ 0 | ||||||||||||||
Percentage of closed investment ownership | 100.00% | |||||||||||||||
Topgame | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Acquisition of game IP rights in cash paid | [5] | $ 3,365,969 | $ 3,156,985 | |||||||||||||
Topgame | SSF | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of equity ownership | 13.00% | 13.00% | ||||||||||||||
Increase in investment | $ 584,000 | ¥ 3,900,000 | ||||||||||||||
Frequency | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Acquisition of game IP rights in cash paid | [6] | 3,000,000 | 3,000,000 | |||||||||||||
Delaware Board of Trade Holdings, Inc. ("DBOT") | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Acquisition of game IP rights in cash paid | [7] | $ 250,000 | $ 0 | |||||||||||||
Purchase of shares | shares | 187,970 | |||||||||||||||
Long-term investments | $ 250,000 | |||||||||||||||
Delaware Board of Trade Holdings, Inc. ("DBOT") | Maximum | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of equity ownership | 4.00% | |||||||||||||||
Game IP Rights | SSS | SSF | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Acquisition of game IP rights in cash | $ 2,700,000 | ¥ 18,000,000 | ||||||||||||||
Capital Increase Agreement | Topgame | SSF | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of equity ownership | 13.00% | |||||||||||||||
Series A Preferred Stock Purchase Agreement | Frequency | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Purchase of shares | shares | 8,566,271 | |||||||||||||||
Percentage of equity ownership | 9.00% | |||||||||||||||
Common stock issuance | $ 3,000,000 | |||||||||||||||
Preferred stock non-cumulative dividends rate per share | $ / shares | $ 0.02548 | |||||||||||||||
Preferred stock convertible into common stock basis | 1:1 | |||||||||||||||
Preferred stock liquidation preference per share | $ / shares | $ 0.42467 | |||||||||||||||
Stock Purchase Agreement | Delaware Board of Trade Holdings, Inc. ("DBOT") | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Purchase of shares | shares | 2,543,546 | |||||||||||||||
Common stock issuance | $ 1,627,869 | |||||||||||||||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") | |||||||||||||||
[2] | Investment in Shandong Media As of the years ended December 31 2017 and 2016, the Company held 30% equity ownership in Shandong Media, and accounts for the investment by the equity method. The investment was fully impaired as of December 31, 2017 and 2016. | |||||||||||||||
[3] | Investment in Hua Cheng As of the years ended December 31, 2017 and 2016, the Company held 39% equity ownership in Hua Cheng, and accounted for the investment by the equity method. | |||||||||||||||
[4] | Investment in Wecast Internet In October 2016, the Company's subsidiary, YOU On Demand (Asia) Ltd., invested RMB 1,000,000 (approximately $149,750) in Wecast Internet Limited ("Wecast Internet") and held its 50% equity ownership. In 2017, Wecast Internet closed its 100% owned subsidiary and the Company received $35,612 previous capital investment, and expects to receive the remaining from Wecast Internet in 2018. | |||||||||||||||
[5] | Investment in Topgame On April 13, 2016, SSF entered into a Game Right Assignment Agreement with SSS for the acquisition of certain game IP rights ("Game IP Rights") for approximately $2.7 million (RMB18 million) in cash. On April 15, 2016, SSF entered into a Capital Increase Agreement with Nanjing Tops Game Co., Ltd. ("Topsgame") and its shareholders whereby SSF transferred the Game IP Rights acquired from SSS to Topsgame in exchange for 13% of Topsgame's equity ownership. Topsgame is a PRC company that specializes in the independent development and operation of online, stand-alone and other games as well as the distribution of domestic and overseas games. The Company's 13% ownership interest does not provide the Company with the right to nor does the Company have representation on the board of directors of Topsgame. The Company has recognized the cost of the investment in Topsgame, which is a private company with no readily determinable fair value, based on the acquisition cost of Game IP Rights of approximately $2.7 million and accounts for the investment by the cost method. On September 14, 2016, SSF increased its investment in Topsgame by RMB 3,900,000 (approximately $584,000) and maintained its 13% equity ownership of Topsgame. The investment continued to be accounted for using the cost method. The Company plans to sell investment in Topgame. | |||||||||||||||
[6] | Investment in Frequency In April 2016, the Company and Frequency Networks Inc. ("Frequency") entered into a Series A Preferred Stock Purchase Agreement (the "SPA") for the purchase of 8,566,271 shares of Series A Preferred Stock, Frequency (the "Frequency Preferred Stock") for a total purchase price of $3 million. The 8,566,271 Series A Preferred Stock represent 9% ownership and voting interest on an as converted basis and does not provide the Company with the right to nor does the Company have representation on the board of directors of Frequency. The Frequency Preferred Stock is entitled to non-cumulative dividends at the rate of $0.02548 per share per annum, declared at the discretion of Frequency's board of directors. The Frequency Preferred Stock is also convertible into shares of Frequency common stock at the Company's election any time after issuance on a 1:1 basis, subject to certain adjustment. Each share of Frequency Preferred Stock also has a liquidation preference of $0.42467 per share, plus any declared but unpaid dividends. The Company has recognized the cost of the investment in Frequency, which is a private company with no readily determinable fair value, at its cost of $3 million and accounts for the investment by the cost method. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of our cost method investments, accordingly the fair value of our cost method investments are not estimated. | |||||||||||||||
[7] | Investment in DBOT In August, 2017, the Company made a strategic investment of US$250,000 in the Delaware Board of Trade Holdings, Inc. ("DBOT") to acquire 187,970 common shares. DBOT is an approved and licensed FINRA- and SEC-regulated electronic trading platform with operations in Delaware. One of our subsidiaries is powered by DBOT's platform, trading system and technology. The Company accounts for this investment using the cost method, as the Company owns less than 4% of the common shares and the Company has no significant influence over DBOT. On December 18, 2017, the Company enters into stock purchase agreement with certain existing DBOT shareholders to acquire their owned shares of common stock of DBOT in an aggregate amount of 2,543,546 shares. To acquire those shares, the Company agreed to issue in the aggregate amount of 1,627,869 SSC common stock. The closing of this transaction shall occur within 30 days of the execution of this agreement, and therefore the Company did not issue the shares and recorded it as investment as of December 31, 2017. |
Stockholder's Equity (Detail Te
Stockholder's Equity (Detail Textuals) - USD ($) | Nov. 11, 2016 | Aug. 12, 2016 | Aug. 11, 2016 | Jul. 06, 2016 | Oct. 23, 2017 | May 19, 2017 | Nov. 17, 2016 | Jul. 19, 2016 | Mar. 28, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders Equity [Line Items] | |||||||||||
Common stock financing | $ 10,000,000 | $ 11,975,590 | $ 10,000,000 | ||||||||
Exercise price of warrants | $ 2.47 | ||||||||||
Common Stock Purchase Agreement | Investors, officers & directors and affiliates | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Number of common stock agreed to sell and issue | 727,273 | ||||||||||
Common stock financing | $ 2,000,000 | ||||||||||
Shares issued, price per share (in dollars per share) | $ 2.75 | ||||||||||
Amended SSS Purchase Agreement | SSS | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Number of common stock agreed to sell and issue | 4,545,455 | ||||||||||
Common stock financing | $ 10,000,000 | ||||||||||
Shares issued, price per share (in dollars per share) | $ 2.20 | ||||||||||
Acquire additional common stock | 1,818,182 | ||||||||||
Exercise price of warrants | $ 2.75 | ||||||||||
Seven Stars Works Co., Ltd | Common Stock Purchase Agreement | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Number of common stock agreed to sell and issue | 2,272,727 | ||||||||||
Common stock financing | $ 4,000,000 | $ 4,000,000 | |||||||||
Shares issued, price per share (in dollars per share) | $ 1.76 | ||||||||||
Number of shares issued | 2,272,727 | ||||||||||
Harvest Alternative Investment Opportunities SPC | Common Stock Purchase Agreement | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Number of common stock agreed to sell and issue | 2,272,727 | ||||||||||
Common stock financing | $ 4,000,000 | $ 4,000,000 | |||||||||
Shares issued, price per share (in dollars per share) | $ 1.76 | ||||||||||
Number of shares issued | 2,272,727 | ||||||||||
Sun Seven Stars Hong Kong Cultural Development Limited | Common Stock Purchase Agreement | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Number of common stock agreed to sell and issue | 1,136,365 | ||||||||||
Common stock financing | $ 2,000,000 | $ 2,000,000 | |||||||||
Shares issued, price per share (in dollars per share) | $ 1.76 | ||||||||||
Number of shares issued | 1,136,365 | ||||||||||
Hong Kong Guo Yuan Group Capital Holdings Limited | Securities Purchase Agreement | |||||||||||
Stockholders Equity [Line Items] | |||||||||||
Number of common stock agreed to sell and issue | 5,494,505 | ||||||||||
Common stock financing | $ 10,000,000 | ||||||||||
Shares issued, price per share (in dollars per share) | $ 1.82 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Risk-free interest rate | 0.70% |
Expected volatility | 55.00% |
Expected term | 8 months 1 day |
Expected dividend yield | 0.00% |
Fair Value Measurements (Deta66
Fair Value Measurements (Details 1) - Warrants - Fair value on recurring basis | Dec. 31, 2016USD ($) |
Level 1 | |
Liabilities, Fair Value Disclosure [Abstract] | |
Warrant liabilities (see Note14) | $ 0 |
Level 2 | |
Liabilities, Fair Value Disclosure [Abstract] | |
Warrant liabilities (see Note14) | 0 |
Level 3 | |
Liabilities, Fair Value Disclosure [Abstract] | |
Warrant liabilities (see Note14) | 70,785 |
Total Fair Value | |
Liabilities, Fair Value Disclosure [Abstract] | |
Warrant liabilities (see Note14) | $ 70,785 |
Fair Value Measurements (Deta67
Fair Value Measurements (Details 2) - Warrants - Fair value on recurring basis - Level 3 - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Warrant liabilities January 1 | $ 70,785 | $ 395,217 |
Settlements | (183,427) | 0 |
Change in Fair Value gain | 112,642 | (324,432) |
Warrant liabilities December 31 | $ 0 | $ 70,785 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Related Party Transactions [Abstract] | ||||
Revenue from crude oil sale | [1] | $ 18,973,054 | [2] | |
Licensed content cost | [3] | 219,000 | ||
Interest expense on convertible note | [4] | $ 120,000 | $ 120,000 | |
[1] | Crude Oil Trading In December, 2017, One of our crude oil transaction was sold to one entity of which our minority shareholder has significant influence upon. Even though the crude oil was eventually sold to independent third party, the Company has recorded this sale as one separate related party sale in its financial statement. As of December 31, 2017, invoice related to this transaction has been collected as payment term of this transaction is pre-payment for full invoice value on pre-payment due date one or two business days before the notice of readiness tendered. | |||
[2] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") | |||
[3] | Cost of Revenue Hua Cheng, in which the Company holds 39% of the equity shares, charged us licensed content fees of approximately nil and $219,000 for the years ended December 31, 2017 and 2016, respectively. | |||
[4] | $3.0 Million Convertible Note On May 10, 2012, the Executive Chairman and Principal Executive Officer, Mr. Shane McMahon, made a loan to the Company in the amount of $3,000,000. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000 (the "Note") at a 4% interest rate computed on the basis of a 365-day year. Upon issuance, the conversion price of the Note was equal to the price per share paid for securities by investors in the most recent financing (as of the date of conversion) of equity or equity-linked securities of the Company. Effective on January 31, 2014, the Company and Mr. McMahon entered into Amendment No. 4 to the Note pursuant to which the Note is at Mr. McMahon's option, payable on demand or convertible on demand into shares of Series E Preferred Stock of the Company (the "Series E Preferred Stock") at a conversion price of $1.75, until December 31, 2015. As a result, in 2014, the Company recognized a beneficial conversion feature discount calculated as the difference between the Series E Preferred Stock at its intrinsic value, which was the fair value of the common stock at the commitment date for the Series E Preferred Stock investment and the effective conversion price. As such, we recognized a beneficial conversion feature of approximately $2,126,000 in 2014 which was reflected as interest expense and additional paid-in capital since the note was payable upon demand. Effective December 30, 2014, the Company and Mr. McMahon entered into Amendment No. 5 pursuant to which the maturity date of the Note was extended to December 31, 2016. The Note remains payable on demand or convertible on demand into shares of Series E Preferred Stock at a conversion price of $1.75 at Mr. McMahon's option. On December 31, 2016, the Company and Mr. McMahon entered into an amendment pursuant to which the Note will be at Mr. McMahon's option, payable on demand or convertible on demand into shares of the Company's Series E Preferred Stock, provided that the Note will no longer be convertible into Series E Preferred Stock upon the conversion of the Series E Preferred stock owned by C Media into the Company's Common Stock (pursuant to which all Series E Preferred Stock will be automatically converted) but then convertible only into Common Stock at a conversion price of $1.50, until December 31, 2018. On November 9, 2017, the Board of Directors approved Amendment No. 7 to $3.0 million Convertible Promissory Notes ("Note") issued to Mr. Shane McMahon, our Vice Chairman, pursuant to which the maturity date of the Note was extended to December 31, 2019. The Note remains payable on demand or convertible on demand into Common Stock at a conversion price of $1.50. In November, 2017, the Company paid such interest in the amount of $407,863 to Mr. Shane McMahon, and the accumulated interest payable as of December 31, 2017 was $20,055. For the years ended December 31, 2017 and 2016, the Company recorded interest expense of $120,000 and $120,000 related to the Note. |
Related Party Transactions (D69
Related Party Transactions (Detail Textuals) - USD ($) | Nov. 09, 2017 | Nov. 30, 2017 | Jan. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | May 10, 2012 | ||
Related Party Transaction [Line Items] | ||||||||
Amount due to related parties | $ 45,639 | $ 1,060,817 | [1] | |||||
Principal amount of convertible note | 50,000,000 | |||||||
Interest expenses related to note | [2] | 120,000 | $ 120,000 | |||||
Accumulated interest payable | $ 20,055 | |||||||
Mr. Shane McMahon | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest expenses related to note | $ 407,863 | |||||||
Mr. Shane McMahon | $3.0 Million Convertible Note | ||||||||
Related Party Transaction [Line Items] | ||||||||
Amount due to related parties | $ 3,000,000 | |||||||
Principal amount of convertible note | $ 3,000,000 | |||||||
Interest rate of convertible note | 4.00% | |||||||
Conversion price of note convertible | $ 1.50 | |||||||
Amount recognized as beneficial conversion feature | $ 2,126,000 | |||||||
Maturity date of the note | Dec. 31, 2019 | Dec. 31, 2015 | ||||||
Mr. Shane McMahon | $3.0 Million Convertible Note | Series E Preferred Stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Conversion price of note convertible | $ 1.75 | $ 1.50 | ||||||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") | |||||||
[2] | $3.0 Million Convertible Note On May 10, 2012, the Executive Chairman and Principal Executive Officer, Mr. Shane McMahon, made a loan to the Company in the amount of $3,000,000. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000 (the "Note") at a 4% interest rate computed on the basis of a 365-day year. Upon issuance, the conversion price of the Note was equal to the price per share paid for securities by investors in the most recent financing (as of the date of conversion) of equity or equity-linked securities of the Company. Effective on January 31, 2014, the Company and Mr. McMahon entered into Amendment No. 4 to the Note pursuant to which the Note is at Mr. McMahon's option, payable on demand or convertible on demand into shares of Series E Preferred Stock of the Company (the "Series E Preferred Stock") at a conversion price of $1.75, until December 31, 2015. As a result, in 2014, the Company recognized a beneficial conversion feature discount calculated as the difference between the Series E Preferred Stock at its intrinsic value, which was the fair value of the common stock at the commitment date for the Series E Preferred Stock investment and the effective conversion price. As such, we recognized a beneficial conversion feature of approximately $2,126,000 in 2014 which was reflected as interest expense and additional paid-in capital since the note was payable upon demand. Effective December 30, 2014, the Company and Mr. McMahon entered into Amendment No. 5 pursuant to which the maturity date of the Note was extended to December 31, 2016. The Note remains payable on demand or convertible on demand into shares of Series E Preferred Stock at a conversion price of $1.75 at Mr. McMahon's option. On December 31, 2016, the Company and Mr. McMahon entered into an amendment pursuant to which the Note will be at Mr. McMahon's option, payable on demand or convertible on demand into shares of the Company's Series E Preferred Stock, provided that the Note will no longer be convertible into Series E Preferred Stock upon the conversion of the Series E Preferred stock owned by C Media into the Company's Common Stock (pursuant to which all Series E Preferred Stock will be automatically converted) but then convertible only into Common Stock at a conversion price of $1.50, until December 31, 2018. On November 9, 2017, the Board of Directors approved Amendment No. 7 to $3.0 million Convertible Promissory Notes ("Note") issued to Mr. Shane McMahon, our Vice Chairman, pursuant to which the maturity date of the Note was extended to December 31, 2019. The Note remains payable on demand or convertible on demand into Common Stock at a conversion price of $1.50. In November, 2017, the Company paid such interest in the amount of $407,863 to Mr. Shane McMahon, and the accumulated interest payable as of December 31, 2017 was $20,055. For the years ended December 31, 2017 and 2016, the Company recorded interest expense of $120,000 and $120,000 related to the Note. |
Related Party Transactions (D70
Related Party Transactions (Detail Textuals 1) ¥ in Millions | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Apr. 13, 2016USD ($) | Apr. 13, 2016CNY (¥) | ||
Related Party Transaction [Line Items] | |||||
Licensed content fees | [1] | $ 219,000 | |||
Hua Cheng | |||||
Related Party Transaction [Line Items] | |||||
Licensed content fees | $ 0 | $ 219,000 | |||
Percentage of equity ownership | 39.00% | 39.00% | |||
SSS | SSF | Game Right Assignment Agreement | |||||
Related Party Transaction [Line Items] | |||||
Acquisition of game IP rights in cash | $ 2,700,000 | ¥ 18 | |||
[1] | Cost of Revenue Hua Cheng, in which the Company holds 39% of the equity shares, charged us licensed content fees of approximately nil and $219,000 for the years ended December 31, 2017 and 2016, respectively. |
Related Party Transactions (D71
Related Party Transactions (Detail Textuals 2) ¥ in Millions | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2017USD ($) | Jun. 30, 2017CNY (¥) | Sep. 19, 2016USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2017CNY (¥) | ||
Related Party Transaction [Line Items] | ||||||
Acquisition of MYP and WAG | $ 76,930 | |||||
Goodwill | [1] | $ 6,648,911 | ||||
Sun Video Group HK Limited | M.Y. Products LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of ownership of shares to be purchase | 51.00% | |||||
Acquisition of MYP and WAG | $ 50,000,000 | |||||
Cash consideration for exchange | 800,000 | |||||
Good faith deposit amount | $ 800,000 | |||||
BT Capital Global Limited | BT SPA | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from sale of core assets | $ 14,750,000 | ¥ 100 | ||||
Minimum percentage of total consideration to be paid in cash | 20.00% | 20.00% | ||||
Average daily trading value | $ 146,000 | |||||
Cash consideration | $ 2,950,000 | |||||
Topgame | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of equity ownership | 13.00% | 13.00% | ||||
Cash consideration | ¥ | ¥ 100 | |||||
Pantaflix JV | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of equity ownership | 25.00% | 25.00% | ||||
Cash consideration | ¥ | ¥ 100 | |||||
Zhong Hai Shi Xun Media | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of equity ownership | 80.00% | 80.00% | ||||
Goodwill | $ 6,600,000 | |||||
Cash consideration | $ 0 | |||||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Related Party Transactions (D72
Related Party Transactions (Detail Textuals 3) - Dec. 07, 2017 - Securities Purchase Agreement - Shanghai Guang Ming ¥ in Millions | USD ($) | CNY (¥) |
Related Party Transaction [Line Items] | ||
Limited liability percentage | 100.00% | |
Business Acquisition, Transaction Costs | $ 363,436 | ¥ 2.4 |
Notice period for cash refund to entity | 15 days |
SSS Agreements (Detail Textuals
SSS Agreements (Detail Textuals) - Common Stock Purchase Agreement - USD ($) $ / shares in Units, $ in Millions | Nov. 11, 2016 | Jul. 06, 2016 | Nov. 17, 2016 | Jul. 19, 2016 |
Seven Stars Works Co., Ltd | ||||
Agreement [Line Items] | ||||
Number of shares issued | 2,272,727 | |||
Shares issued, price per share (in dollars per share) | $ 1.76 | |||
Total purchase price | $ 4 | |||
Sun Seven Stars Hong Kong Cultural Development Limited ("SSSHKCD") | ||||
Agreement [Line Items] | ||||
Number of shares issued | 1,136,365 | |||
Shares issued, price per share (in dollars per share) | $ 1.76 | |||
Total purchase price | $ 2 |
SSS Agreements (Detail Textua74
SSS Agreements (Detail Textuals 1) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 28, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Agreement [Line Items] | |||
Aggregate purchase price | $ 10,000,000 | $ 11,975,590 | $ 10,000,000 |
Exercise price of warrants | $ 2.47 | ||
Recorded additional paid-in capital for warrants | $ 724,790 | ||
Common Stock | |||
Agreement [Line Items] | |||
Number of common stock issued | 6,221,778 | 5,681,819 | |
Aggregate purchase price | $ 6,222 | $ 5,681 | |
Amended SSS Purchase Agreement | SSS | |||
Agreement [Line Items] | |||
Number of common stock issued | 4,545,455 | ||
Purchase price per share (in dollars per share) | $ 2.20 | ||
Aggregate purchase price | $ 10,000,000 | ||
Term of warrants | 2 years | ||
Acquire additional common stock | 1,818,182 | ||
Exercise price of warrants | $ 2.75 | ||
Percentage of outstanding common stock owned | 19.99% | ||
Proceeds from issuance of shares | $ 10,000,000 | ||
Issuance cost, net | 411,000 | ||
Recorded additional paid-in capital for warrants | 725,000 | ||
Amended SSS Purchase Agreement | SSS | Common Stock | |||
Agreement [Line Items] | |||
Fair value of common stock/equity | 8,227,000 | ||
Amended SSS Purchase Agreement | SSS | Warrants | |||
Agreement [Line Items] | |||
Fair value of common stock/equity | $ 673,000 |
SSS Agreements (Detail Textua75
SSS Agreements (Detail Textuals 2) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jun. 27, 2016 | Mar. 28, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Agreement [Line Items] | |||||
Amortized SSS Notes | [1] | $ 122,696 | |||
Accrued interest expense | [2] | $ 120,000 | 120,000 | ||
Revised Content Agreement | SSS | Convertible promissory note | |||||
Agreement [Line Items] | |||||
Principal amount of SSS notes | $ 17,718,000 | ||||
SSS Note, interest rate | 0.56% | ||||
Percentage of outstanding common stock owned | 19.99% | ||||
SSS Note converted to common stock shares | 9,208,860 | ||||
Debt issuance costs | $ 131,000 | ||||
Amortized SSS Notes | $ 123,000 | ||||
Effective conversion price of the SSS Note | $ 1.91 | ||||
Fair value of common stock per stock | $ 1.81 | ||||
Unamortized issuance costs | $ 8,000 | ||||
Accrued interest expense | $ 25,000 | ||||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") | ||||
[2] | $3.0 Million Convertible Note On May 10, 2012, the Executive Chairman and Principal Executive Officer, Mr. Shane McMahon, made a loan to the Company in the amount of $3,000,000. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000 (the "Note") at a 4% interest rate computed on the basis of a 365-day year. Upon issuance, the conversion price of the Note was equal to the price per share paid for securities by investors in the most recent financing (as of the date of conversion) of equity or equity-linked securities of the Company. Effective on January 31, 2014, the Company and Mr. McMahon entered into Amendment No. 4 to the Note pursuant to which the Note is at Mr. McMahon's option, payable on demand or convertible on demand into shares of Series E Preferred Stock of the Company (the "Series E Preferred Stock") at a conversion price of $1.75, until December 31, 2015. As a result, in 2014, the Company recognized a beneficial conversion feature discount calculated as the difference between the Series E Preferred Stock at its intrinsic value, which was the fair value of the common stock at the commitment date for the Series E Preferred Stock investment and the effective conversion price. As such, we recognized a beneficial conversion feature of approximately $2,126,000 in 2014 which was reflected as interest expense and additional paid-in capital since the note was payable upon demand. Effective December 30, 2014, the Company and Mr. McMahon entered into Amendment No. 5 pursuant to which the maturity date of the Note was extended to December 31, 2016. The Note remains payable on demand or convertible on demand into shares of Series E Preferred Stock at a conversion price of $1.75 at Mr. McMahon's option. On December 31, 2016, the Company and Mr. McMahon entered into an amendment pursuant to which the Note will be at Mr. McMahon's option, payable on demand or convertible on demand into shares of the Company's Series E Preferred Stock, provided that the Note will no longer be convertible into Series E Preferred Stock upon the conversion of the Series E Preferred stock owned by C Media into the Company's Common Stock (pursuant to which all Series E Preferred Stock will be automatically converted) but then convertible only into Common Stock at a conversion price of $1.50, until December 31, 2018. On November 9, 2017, the Board of Directors approved Amendment No. 7 to $3.0 million Convertible Promissory Notes ("Note") issued to Mr. Shane McMahon, our Vice Chairman, pursuant to which the maturity date of the Note was extended to December 31, 2019. The Note remains payable on demand or convertible on demand into Common Stock at a conversion price of $1.50. In November, 2017, the Company paid such interest in the amount of $407,863 to Mr. Shane McMahon, and the accumulated interest payable as of December 31, 2017 was $20,055. For the years ended December 31, 2017 and 2016, the Company recorded interest expense of $120,000 and $120,000 related to the Note. |
SSS Agreements (Detail Textua76
SSS Agreements (Detail Textuals 3) - USD ($) | Nov. 10, 2016 | Apr. 05, 2016 | Jun. 27, 2016 | Dec. 21, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Agreement [Line Items] | ||||||||
Net loss | $ (9,835,601) | $ (26,407,974) | [1] | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | [1] | |||||
Earn-out share award expense | [1] | $ 13,700,000 | ||||||
SSF | Tianjin Enternet | ||||||||
Agreement [Line Items] | ||||||||
Percentage of variable interest entity | 100.00% | |||||||
SSF | Lan Yang | ||||||||
Agreement [Line Items] | ||||||||
Percentage of variable interest entity | 99.00% | |||||||
SSF | Yun Zhu | ||||||||
Agreement [Line Items] | ||||||||
Percentage of variable interest entity | 1.00% | |||||||
Amended Tianjin Agreement | Tianjin Enternet | Board | ||||||||
Agreement [Line Items] | ||||||||
Earn-out share award | 10,000,000 | 15,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||
Amended Tianjin Agreement | SSS | ||||||||
Agreement [Line Items] | ||||||||
Percentage of outstanding common stock owned | 19.99% | |||||||
Amended Tianjin Agreement | SSF | Tianjin Enternet | ||||||||
Agreement [Line Items] | ||||||||
Contribution of equity ownership | 100.00% | |||||||
Receive shares of common stock, term | 3 years | |||||||
Per year receive shares of common stock | 5,000,000 | |||||||
Amended Tianjin Agreement | SSF | Earn-out provisions 2016 | Tianjin Enternet | ||||||||
Agreement [Line Items] | ||||||||
Earn-out provision homes/users passed | $ 50,000,000 | |||||||
Net loss | 4,000,000 | |||||||
Amended Tianjin Agreement | SSF | Earn-out provisions 2017 | Tianjin Enternet | ||||||||
Agreement [Line Items] | ||||||||
Earn-out provision homes/users passed | 100,000,000 | |||||||
Net loss | 6,000,000 | |||||||
Amended Tianjin Agreement | SSF | Earn-out provisions 2018 | Tianjin Enternet | ||||||||
Agreement [Line Items] | ||||||||
Earn-out provision homes/users passed | 150,000,000 | |||||||
Net loss | $ 8,000,000 | |||||||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Warrant Liabilities (Detail Tex
Warrant Liabilities (Detail Textuals) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2017 | Aug. 30, 2017 | Aug. 30, 2012 | |
Warrant Liabilities [Abstract] | ||||
Number of shares called by warrants | 977,063 | |||
Warrant liabilities | $ 70,785 | $ 1,525,000 | ||
Amount of adjustment of estimated fair value | $ 70,785 | |||
Number of warrants exercised | 182,534 | |||
Number of warrants expired | 353,716 |
Share-Based Payments (Details)
Share-Based Payments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Employees and directors share-based payments | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based payments expense | $ 1,305,829 | $ 319,718 |
Share-Based Payments (Details 1
Share-Based Payments (Details 1) - Stock Options - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Options Outstanding | ||
Outstanding at January 1, 2017 | 2,101,428 | |
Granted | 733,200 | |
Exercised | (258,455) | |
Expired | (89,731) | |
Forfeited | (633,051) | |
Outstanding at December 31, 2017 | 1,853,391 | 2,101,428 |
Vested and expected to be vested as of December 31, 2017 | 1,853,391 | |
Options exercisable at December 31, 2017 (vested) | 1,662,591 | |
Weighted Average Exercise Price | ||
Outstanding at January 1, 2017 | $ 2.42 | |
Granted | 4.34 | |
Exercised | 1.83 | |
Expired | 3.22 | |
Forfeited | 2.81 | |
Outstanding at December 31, 2017 | 3.20 | $ 2.42 |
Vested and expected to be vested as of December 31, 2017 | 3.20 | |
Options exercisable at December 31, 2017 (vested) | $ 3.19 | |
Weighted Average Remaining Contractual Life (Years) | ||
Outstanding at December 31, 2017 | 2 years 11 months 27 days | 4 years 7 months 2 days |
Vested and expected to be vested as of December 31, 2017 | 2 years 11 months 27 days | |
Options exercisable at December 31, 2017 (vested) | 4 years 4 months 17 days | |
Aggregated Intrinsic Value | ||
Outstanding at December 31, 2017 | $ 0.02 | |
Vested and expected to be vested as of December 31, 2017 | 0.02 | |
Options exercisable at December 31, 2017 (vested) | $ 0.03 |
Share-Based Payments (Details 2
Share-Based Payments (Details 2) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Expected term | 5 years 4 months 24 days | 1 year 8 months 12 days |
Expected volatility | 55.00% | 55.00% |
Risk-free interest rate | 2.04% | 0.54% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Expected term | 5 years 10 months 24 days | 5 years 10 months 24 days |
Expected volatility | 85.00% | 70.00% |
Risk-free interest rate | 2.29% | 1.35% |
Share-Based Payments (Details 3
Share-Based Payments (Details 3) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 2,521,896 | 3,783,002 | |
Exercise price of warrants | $ 2.47 | ||
2012 August Financing Warrants | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | [1] | 0 | 536,250 |
Exercise price of warrants | [1] | $ 1.5 | |
Expiration Date | [1] | Aug. 30, 2017 | |
2013 Broker Warrants (Series D Financing) | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 0 | 228,571 | |
Exercise price of warrants | $ 1.75 | ||
Expiration Date | Jul. 5, 2018 | ||
2013 Broker Warrants (Convertible Note) | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 0 | 114,285 | |
Exercise price of warrants | $ 1.75 | ||
Expiration Date | Nov. 4, 2018 | ||
2014 Broker Warrants (Series E Financing) | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 703,714 | 1,085,714 | |
Exercise price of warrants | $ 1.75 | ||
Expiration Date | Jan. 31, 2019 | ||
2016 Warrants to SSS (Note 12) | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 1,818,182 | 1,818,182 | |
Exercise price of warrants | $ 2.75 | ||
Expiration Date | Mar. 28, 2018 | ||
[1] | The warrants are classified as derivative liabilities as disclosed in Note 11. |
Share-Based Payments (Details 4
Share-Based Payments (Details 4) - Restricted Stock | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Shares | |
Restricted shares outstanding at January 1, 2017 | shares | 228,550 |
Granted | shares | 417,953 |
Forfeited | shares | (401,249) |
Vested | shares | (135,668) |
Restricted shares outstanding at December 31, 2017 | shares | 109,586 |
Weighted-average fair value | |
Restricted shares outstanding at January 1, 2017 | $ / shares | $ 1.75 |
Granted | $ / shares | 2.21 |
Forfeited | $ / shares | 2.02 |
Vested | $ / shares | 2.24 |
Restricted shares outstanding at December 31, 2017 | $ / shares | $ 1.92 |
Share-Based Payments (Detail Te
Share-Based Payments (Detail Textuals) | Mar. 16, 2017USD ($)shares | Jan. 04, 2017USD ($)shares | Nov. 30, 2017USD ($)Directorshares | Nov. 17, 2017USD ($)shares | Nov. 01, 2017USD ($)shares | Apr. 30, 2017USD ($)shares | Mar. 01, 2017USD ($)shares | Jan. 31, 2017USD ($)Employeeshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)shares | Dec. 03, 2010shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Warrants outstanding to purchase shares of common stock | 2,521,896 | 3,783,002 | |||||||||
Unrecognized compensation expense related to non-vested share options | $ | $ 429,585 | ||||||||||
Weighted average period for recognition related to non-vested share options | 1 year 5 months 1 day | ||||||||||
Total fair value of vested shares | $ | $ 974,237 | $ 12,000 | |||||||||
Weighted average exercise price of warrants | $ / shares | $ 2.47 | ||||||||||
Weighted average remaining life of warrants | 5 months 19 days | ||||||||||
2010 Stock Incentive Plan ("the Plan") | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares authorized for issuance | 4,000,000 | ||||||||||
Number of options available for issuance | 1,368,243 | ||||||||||
Employee | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock options issued to employees | 35,000 | 90,000 | 503,200 | 60,000 | 45,000 | ||||||
Fair value of stock options granted | $ | $ 36,750 | $ 61,200 | $ 1,953,416 | $ 79,200 | $ 45,443 | ||||||
Board of Directors | 2010 Stock Incentive Plan ("the Plan") | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Restricted shares granted | 4,488 | ||||||||||
Amount of grant date fair value of the restricted shares | $ | $ 100,000 | ||||||||||
Number of directors | Director | 4 | ||||||||||
SSS | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Warrants outstanding to purchase shares of common stock | 1,818,182 | ||||||||||
Restricted Stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of restricted shares to purchase shares of common stock | 109,586 | 228,550 | |||||||||
Restricted shares granted | 417,953 | ||||||||||
Restricted Stock | 2010 Stock Incentive Plan ("the Plan") | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Restricted shares granted | 365,000 | 35,000 | |||||||||
Number of employees | Employee | 1 | ||||||||||
Restricted shares, vesting period | 4 years | 4 years | |||||||||
Amount of grant date fair value of the restricted shares | $ | $ 778,200 | $ 43,750 | |||||||||
Stock Options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Options outstanding to purchase shares of common stock | 1,853,391 | 2,101,428 | |||||||||
Stock options issued to employees | 733,200 |
Loss Per Common Share (Details)
Loss Per Common Share (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Earnings Per Share [Abstract] | |||
Net loss attributable to common stockholders | $ (9,835,601) | $ (26,407,974) | [1] |
Basic | |||
Basic weighted average common shares outstanding | 61,182,209 | 35,998,001 | |
Diluted | |||
Diluted weighted average common shares outstanding | 61,182,209 | 35,998,001 | |
Net loss per share: | |||
Basic | $ (0.16) | $ (0.73) | |
Diluted | $ (0.16) | $ (0.73) | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Loss Per Common Share (Details
Loss Per Common Share (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 40,964,909 | 16,344,705 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 2,521,896 | 3,783,002 |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 2,162,977 | 2,101,428 |
Series A Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 933,333 | 933,333 |
Series E Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 0 | 7,154,997 |
Convertible promissory note and interest | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 35,346,703 | 2,371,945 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | |||
Operating Loss Carryforwards [Line Items] | ||||
Loss before tax | $ (10,192,869) | $ (28,831,089) | [1] | |
Deferred tax benefit of net operating loss | [1] | (330,124) | ||
Deferred tax benefit other than benefit of net operating loss | 0 | 0 | ||
Total income tax benefit | [1] | (330,124) | ||
United States | ||||
Operating Loss Carryforwards [Line Items] | ||||
Loss before tax | (8,461,323) | (15,069,992) | ||
Deferred tax benefit of net operating loss | 0 | 0 | ||
Deferred tax benefit other than benefit of net operating loss | 0 | 0 | ||
PRC/Hong Kong | ||||
Operating Loss Carryforwards [Line Items] | ||||
Loss before tax | (1,731,546) | (12,966,714) | ||
Deferred tax benefit of net operating loss | 0 | (330,124) | ||
Deferred tax benefit other than benefit of net operating loss | $ 0 | $ 0 | ||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
U. S. statutory income tax rate | 34.00% | 34.00% |
Non-deductible expenses: | ||
Earn out shares award expense | 0.00% | (16.60%) |
Waiver Of Intercompany Loan | 14.70% | 0.00% |
Others | (2.90%) | (3.30%) |
Non-deductible interest expenses | (0.40%) | (0.30%) |
Non-taxable change in fair value warrant liabilities | (0.40%) | 0.40% |
Increase in valuation allowance | (21.60%) | (8.20%) |
Tax rate differential | (23.40%) | (3.30%) |
Others | 0.00% | (1.50%) |
Effective income tax rate | 0.00% | 1.20% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
U.S. NOL | $ 6,152,242 | $ 12,501,988 |
Foreign NOL | 5,365,437 | 5,765,422 |
Accrued payroll and expense | 132,812 | 226,950 |
Nonqualified options | 760,213 | 576,975 |
Provision for doubtful accounts | 0 | 412,102 |
Impairment of licensed content | 0 | 124,810 |
Others | 30,040 | 31,120 |
Total deferred tax assets | 12,440,744 | 19,639,367 |
Less: valuation allowance | $ (12,440,744) | $ (19,639,367) |
Income Taxes (Detail Textuals)
Income Taxes (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | ||
PRC income tax rate | 25.00% | |
Withholding income tax rate | 10.00% | |
Withholding tax on dividends rate | 5.00% | |
Statutory income tax rate | 34.00% | 34.00% |
Corporate income tax rate effective in 2018 | 21.00% | |
Reduction in deferred tax assets due to change in tax rate | $ 4.4 | |
Valuation allowance increased (decreased) | (7.2) | $ 2.9 |
U.S domestic | ||
Operating Loss Carryforwards [Line Items] | ||
Cumulative tax loss carryforwards | $ 29.3 | |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Statutory income tax rate | 16.50% | |
Cumulative tax loss carryforwards | $ 25.5 | |
Foreign | Hong Kong | ||
Operating Loss Carryforwards [Line Items] | ||
Statutory income tax rate | 16.50% | |
Foreign | Singapore | ||
Operating Loss Carryforwards [Line Items] | ||
Statutory income tax rate | 17.00% |
Contingencies and Commitments90
Contingencies and Commitments (Details) | Dec. 31, 2017USD ($) |
Years ending December 31, | |
2,018 | $ 733,439 |
2,019 | 185,444 |
2,020 | 189,933 |
Thereafter | 94,967 |
Total | $ 1,203,783 |
Concentration, Credit and Oth91
Concentration, Credit and Other Risks (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
RMB denominated bank deposits | PRC | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | $ 311,894 | $ 1,566,107 |
US dollar denominated bank deposits | PRC | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | 628,481 | 670,951 |
US dollar denominated bank deposits | Hong Kong Special Administrative Region (HKSAR) | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | 1,505,271 | 1,402,842 |
US dollar denominated bank deposits | The United States of America (USA) | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | 3,698,704 | 95,030 |
US dollar denominated bank deposits | Singapore (Singapore) | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | 1,033,769 | 0 |
HKD denominated bank deposits | Hong Kong Special Administrative Region (HKSAR) | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | $ 17,508 | $ 14,151 |
Concentration, Credit and Oth92
Concentration, Credit and Other Risks (Detail Textuals) | Oct. 08, 2016CNY (¥)Installment | Dec. 31, 2017CNY (¥)Customer | Dec. 31, 2016CNY (¥)Customer |
Legacy YOD | Yanhua Agreement | |||
Revenue, Major Customer [Line Items] | |||
First installments of agreement | ¥ 6,500,000 | ||
Amount recognized as revenue of the first installment | ¥ 6,500,000 | ||
Major Customers | Legacy YOD | Yanhua Agreement | |||
Revenue, Major Customer [Line Items] | |||
Minimal guarantee fee | ¥ 13,000,000 | ||
Total price of the existing agreement to be transferred | 13,000,000 | ||
Second installments of agreement to be paid in three months from the date when the first installment | 6,500,000 | ||
Amount recognized as revenue of the first installment | ¥ 6,500,000 | ||
Number Of Installments | Installment | 2 | ||
Major Customers | Legacy YOD | Revenue | |||
Revenue, Major Customer [Line Items] | |||
Description of percentage of revenue for major customer | more than 10% | ||
Number of customers | Customer | 4 | 4 | |
Major Customers | Legacy YOD | Revenue | Aishang TV | |||
Revenue, Major Customer [Line Items] | |||
Percentage of concentration risk | 22.00% | ||
Major Customers | Legacy YOD | Revenue | Huawei | |||
Revenue, Major Customer [Line Items] | |||
Percentage of concentration risk | 15.00% | ||
Major Customers | Legacy YOD | Revenue | Dongfang Shijie | |||
Revenue, Major Customer [Line Items] | |||
Percentage of concentration risk | 12.00% | ||
Major Customers | Legacy YOD | Revenue | Bo Tai Heng Tong | |||
Revenue, Major Customer [Line Items] | |||
Percentage of concentration risk | 10.00% | ||
Major Customers | Legacy YOD | Revenue | Distribution partner | |||
Revenue, Major Customer [Line Items] | |||
Description of percentage of revenue for major customer | more than 10% | ||
Major Customers | Legacy YOD | Accounts receivables | Aishang TV | |||
Revenue, Major Customer [Line Items] | |||
Percentage of concentration risk | 93.00% | ||
Major Customers | Wecast Services | Revenue | |||
Revenue, Major Customer [Line Items] | |||
Description of percentage of revenue for major customer | more than 10% | more than 10% | |
Number of customers | Customer | 2 | 3 | |
Major Customers | Wecast Services | Accounts receivables | |||
Revenue, Major Customer [Line Items] | |||
Description of percentage of revenue for major customer | more than 10% | more than 10% | |
Number of customers | Customer | 3 | 4 |
Concentration, Credit and Oth93
Concentration, Credit and Other Risks (Detail Textuals 1) | 12 Months Ended | |
Dec. 31, 2017USD ($)Supplier | Dec. 31, 2016USD ($)Supplier | |
Revenue, Major Customer [Line Items] | ||
Insured deposit | $ | $ 398,243 | $ 384,545 |
Legacy YOD | Licensed Content Commitment | ||
Revenue, Major Customer [Line Items] | ||
Cost of revenues | $ | $ 17,700,000 | |
Legacy YOD | Major Suppliers | Cost of revenues | ||
Revenue, Major Customer [Line Items] | ||
Description of percentage of revenue for major supplier | more than 10% | |
Number of suppliers | 4 | |
Legacy YOD | Major Suppliers | Cost of revenues | Content partner | ||
Revenue, Major Customer [Line Items] | ||
Description of percentage of revenue for major supplier | more than 10% | |
Legacy YOD | Major Suppliers | Accrued license content fees | ||
Revenue, Major Customer [Line Items] | ||
Number of suppliers | 2 | |
Percentage of concentration risk | 10.00% | |
Wecast Services | Major Suppliers | Cost of revenues | ||
Revenue, Major Customer [Line Items] | ||
Description of percentage of revenue for major supplier | more than 10% | more than 10% |
Number of suppliers | 5 | 2 |
Wecast Services | Major Suppliers | Accounts payable | ||
Revenue, Major Customer [Line Items] | ||
Description of percentage of revenue for major supplier | more than 10% | more than 10% |
Number of suppliers | 2 | 2 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Detail Textuals) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Employer matching contribution, percent | 100.00% | |
Employer matching contribution, description | 401(k) defined contribution plan ("401(k) Plan") that provides for a 100% employer matching contribution of the first 3% and a 50% employer matching contribution of each additional percent contributed by an employee up to 5% of each employee's pay. Employees become fully vested in employer matching contributions after six months of employment. | |
Employer matching contribution, amount | $ 13,173 | $ 4,000 |
PRC | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer matching contribution, amount | $ 439,227 | $ 571,476 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
NET SALES TO EXTERNAL CUSTOMERS | |||
Net sales | $ 144,338,805 | $ 35,185,508 | [1] |
GROSS PROFIT | |||
Gross profit | 7,150,452 | (365,690) | [1] |
Legacy YOD | |||
NET SALES TO EXTERNAL CUSTOMERS | |||
Net sales | 794,273 | 4,543,616 | |
GROSS PROFIT | |||
Gross profit | 31,659 | 109,356 | |
Wecast Services | |||
NET SALES TO EXTERNAL CUSTOMERS | |||
Net sales | 143,544,532 | 30,641,892 | |
GROSS PROFIT | |||
Gross profit | $ 7,150,452 | $ (475,046) | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Segment Reporting (Details 1)
Segment Reporting (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | |
Assets [Abstract] | |||
Total | $ 63,039,616 | $ 55,746,290 | [1] |
Legacy YOD | |||
Assets [Abstract] | |||
Total | 27,141,163 | 36,975,911 | |
Wecast Services | |||
Assets [Abstract] | |||
Total | 29,679,735 | 14,448,702 | |
Unallocated assets | |||
Assets [Abstract] | |||
Total | 11,270,378 | 4,321,677 | |
Intersegment elimination | |||
Assets [Abstract] | |||
Total | $ (5,051,660) | $ 0 | |
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |
Subsequent Event (Detail Textua
Subsequent Event (Detail Textuals) - USD ($) | 1 Months Ended | 2 Months Ended | 12 Months Ended | |||
Dec. 18, 2017 | Aug. 31, 2017 | Mar. 28, 2016 | Feb. 28, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Subsequent Event [Line Items] | ||||||
Common stock issuance | $ 10,000,000 | $ 11,975,590 | $ 10,000,000 | |||
Delaware Board of Trade Holdings, Inc. ("DBOT") | ||||||
Subsequent Event [Line Items] | ||||||
Purchase of shares | 187,970 | |||||
Stock Purchase Agreement | Delaware Board of Trade Holdings, Inc. ("DBOT") | ||||||
Subsequent Event [Line Items] | ||||||
Purchase of shares | 2,543,546 | |||||
Common stock issuance | $ 1,627,869 | |||||
Subsequent Event | Stock Purchase Agreement | Delaware Board of Trade Holdings, Inc. ("DBOT") | ||||||
Subsequent Event [Line Items] | ||||||
Purchase of shares | 1,000,000 | |||||
Common stock issuance | $ 640,000 |
Subsequent Event (Detail Text98
Subsequent Event (Detail Textuals 1) - USD ($) | 1 Months Ended | |||
Mar. 17, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | [1] | |
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Subsequent Event | Subscription Agreement | GTD | Convertible promissory note | ||||
Subsequent Event [Line Items] | ||||
Stated principal amount | $ 10,000,000 | |||
Subsequent Event | Subscription Agreement | GTD | Convertible promissory note Two | ||||
Subsequent Event [Line Items] | ||||
Stated principal amount | $ 4,933,121.80 | |||
Interest rate | 0.56% | |||
Beneficial conversion rate | 19.90% | |||
Conversion rate | $ 1.82 | |||
Subsequent Event | Subscription Agreement | GTD | Private placement | ||||
Subsequent Event [Line Items] | ||||
Total amount | $ 40,000,000 | |||
Number of shares issued | 13,773,010 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Price per share | $ 1.82 | |||
Total purchase price | $ 25,066,878.20 | |||
Subsequent Event | Subscription Agreement | GTD | Private placement | On or prior to March 31, 2018 | ||||
Subsequent Event [Line Items] | ||||
Payment of purchase price | 30,000,000 | |||
Subsequent Event | Subscription Agreement | GTD | Private placement | On or prior to April 30, 2018 | ||||
Subsequent Event [Line Items] | ||||
Payment of purchase price | $ 10,000,000 | |||
[1] | The above consolidated balance sheets present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited ("BT") on January 30 and January 31, 2017, respectively as if they had been owned by the Company since November 10, 2016 in accordance with ASC Subtopic 805-50 (See Note 5 "Acquisition") |