Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 09, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | WECAST NETWORK, INC. | |
Entity Central Index Key | 837,852 | |
Trading Symbol | wcst | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 61,189,047 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
UNAUDITED CONSOLIDATED BALANCE
UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | [1] |
Current assets: | |||
Cash | $ 1,054,142 | $ 3,761,814 | |
Accounts receivable, net | 29,196,591 | 9,522,151 | |
Licensed content, current | 883,015 | 124,319 | |
Notes receivable | 421,475 | 1,749,830 | |
Inventory | 217,383 | 203,697 | |
Prepaid expenses | 347,968 | 375,944 | |
Other current assets | 6,925,012 | 3,581,822 | |
Total current assets | 39,045,586 | 19,319,577 | |
Property and equipment, net | 4,760,976 | 4,963,725 | |
Licensed content, non-current | 16,075,134 | 17,593,528 | |
Intangible assets, net | 425,113 | 453,242 | |
Goodwill | 6,648,911 | 6,648,911 | |
Long term investments | 6,635,483 | 6,654,664 | |
Other non-current assets | 57,846 | 112,643 | |
Total assets | 73,649,049 | 55,746,290 | |
Current liabilities: (including amounts of the consolidated VIEs without recourse to Wecast Network, Inc. See note 3) | |||
Accounts payable | 27,231,787 | 13,341,680 | |
Deferred revenue | 609,466 | 1,350,054 | |
Accrued interest due to a related party | 587,688 | 557,918 | |
Accrued other expenses | 1,415,774 | 708,987 | |
Accrued salaries | 807,952 | 766,957 | |
Payable for purchase of building | 992,000 | 987,015 | |
Amount due to related parties | 2,173,891 | ||
Other current liabilities | 331,719 | 1,995,297 | |
Accrued license content fees | 1,189,453 | 1,236,661 | |
Convertible promissory note due to a related party | 3,000,000 | 3,000,000 | |
Warrant liabilities | 340,901 | 70,785 | |
Total current liabilities | 38,680,631 | 24,015,354 | |
Total liabilities | 38,680,631 | 24,015,354 | |
Commitments and contingencies (Note 17) | |||
Convertible redeemable preferred stock: Series A - 7,000,000 shares issued and outstanding, liquidation and deemed liquidation preference of $3,500,000 as of March 31, 2017 and December 31, 2016, respectively | 1,261,995 | 1,261,995 | |
Equity: | |||
Series E Preferred Stock - $0.001 par value; 16,500,000 shares authorized, 1,216,904 and 7,154,997 shares issued and outstanding, liquidation preference of $2,129,586 and $12,521,245 as of March 31, 2017 and December 31, 2016, respectively | 1,217 | 7,155 | |
Common stock - $0.001 par value; 1,500,000,000 shares authorized, 59,891,201 and 53,918,523 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 59,891 | 53,918 | |
Additional paid-in capital | 152,836,057 | 152,755,919 | |
Accumulated deficit | (113,456,389) | (115,669,268) | |
Accumulated other comprehensive loss | (3,282) | (1,353,302) | |
Total Wecast Network shareholders' equity | 39,437,494 | 35,794,422 | |
Non-controlling interest | (5,731,071) | (5,325,481) | |
Total equity | 33,706,423 | 30,468,941 | [2] |
Total liabilities, convertible redeemable preferred stock and equity | $ 73,649,049 | $ 55,746,290 | |
[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 4 "Acquisition") | ||
[2] | The above consolidated statements of equity present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited 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 4 "Acquisition") |
UNAUDITED CONSOLIDATED BALANCE3
UNAUDITED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | [1] |
Convertible redeemable preferred stock, shares issued | 7,000,000 | 7,000,000 | |
Convertible redeemable preferred stock, shares outstanding | 7,000,000 | 7,000,000 | |
Convertible redeemable preferred stock, liquidation and deemed liquidation preference | $ 3,500,000 | $ 3,500,000 | |
Series E Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Series E Preferred Stock, shares authorized | 16,500,000 | 16,500,000 | |
Series E Preferred Stock, shares issued | 1,216,904 | 7,154,997 | |
Series E Preferred Stock, shares outstanding | 1,216,904 | 7,154,997 | |
Series E Preferred Stock, liquidation preference | $ 2,129,586 | $ 12,521,245 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 | |
Common stock, shares issued | 59,891,201 | 53,918,523 | |
Common stock, shares outstanding | 59,891,201 | 53,918,523 | |
[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 4 "Acquisition") |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | $ 33,164,351 | $ 1,269,726 |
Cost of revenue | 29,342,379 | 915,780 |
Gross profit | 3,821,972 | 353,946 |
Operating expenses: | ||
Selling, general and administrative expense | 1,265,172 | 2,165,053 |
Professional fees | 267,133 | 367,446 |
Depreciation and amortization | 196,211 | 97,463 |
Total operating expense | 1,728,516 | 2,629,962 |
Income (loss) from operations | 2,093,456 | (2,276,016) |
Interest and other income (expense) | ||
Interest expense | (41,557) | (33,473) |
Change in fair value of warrant liabilities | (270,116) | 37,023 |
Equity in loss of equity method investees | (43,746) | (10,348) |
Other | (99,570) | 162 |
Income (loss) before income taxes | 1,638,467 | (2,282,652) |
Income tax benefit | 8,612 | |
Net income (loss) | 1,638,467 | (2,274,040) |
Net loss attributable to non-controlling interest | (574,412) | (137,569) |
Net income (loss) attributable to Wecast Network, Inc. shareholders | $ 2,212,879 | $ (2,136,471) |
Basic earnings (loss) per share (in dollars per share) | $ 0.04 | $ (0.09) |
Diluted earnings (loss) per share (in dollars per share) | $ 0.04 | $ (0.09) |
Weighted average shares outstanding: | ||
Diluted (in shares) | 60,715,721 | 24,484,562 |
Basic (in shares) | 55,382,002 | 24,484,562 |
UNAUDITED CONSOLIDATED STATEME5
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 1,638,467 | $ (2,274,040) |
Other comprehensive income (loss), net of nil tax | ||
Foreign currency translation adjustments | 1,518,842 | 13,132 |
Comprehensive income (loss) | 3,157,309 | (2,260,908) |
Comprehensive loss attributable to non-controlling interest | (405,590) | (142,956) |
Comprehensive income (loss) attributable to Wecast Network, Inc. shareholders | $ 3,562,899 | $ (2,117,952) |
UNAUDITED CONSOLIDATED STATEME6
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Cash flows from operating activities: | |||
Net income (loss) | $ 1,638,467 | $ (2,274,040) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Share-based compensation expense | 71,428 | 138,770 | |
Depreciation and amortization | 196,211 | 97,463 | |
Income tax benefit | (8,612) | ||
Equity in loss of equity method investees | 43,746 | 10,348 | |
Loss on disposal of assets | 40,139 | ||
Change in fair value of warrant liabilities | 270,116 | (37,023) | |
Foreign currency exchange losses | 10,590 | ||
Change in assets and liabilities: | |||
Accounts receivable | (19,674,440) | (1,153,595) | |
Licensed content | 1,518,394 | 263,913 | |
Prepaid expenses and other assets | (1,932,566) | 140,391 | |
Accounts payable | 13,890,107 | 237 | |
Accrued expenses, salary and other current liabilities | (881,051) | 691,914 | |
Amount due to related parties | 2,173,891 | ||
Deferred revenue | (740,588) | (15,080) | |
Accrued license content fees | 402,508 | ||
Net cash used in operating activities | (3,386,146) | (1,732,216) | |
Cash flows from investing activities: | |||
Acquisition of and deposit for property and equipment | (5,473) | ||
Net cash used in investing activities | (5,473) | ||
Cash flows from financing activities | |||
Proceeds from issuance of warrant and shares | 8,745 | 10,000,000 | |
Net cash provided by financing activities | 8,745 | 10,000,000 | |
Effect of exchange rate changes on cash | 675,202 | (1,361) | |
Net increase (decrease) in cash | (2,707,672) | 8,266,423 | |
Cash at beginning of period | 3,761,814 | [1] | 3,768,897 |
Cash at end of period | 1,054,142 | 12,035,320 | |
Supplemental Cash Flow Information: | |||
Issuance of convertible note for licensed content (Note 12) | 17,717,847 | ||
Payable for purchase of building | 992,000 | ||
Issuance of shares for the settlement of liability | $ 75,000 | ||
[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 4 "Acquisition") |
UNAUDITED CONSOLIDATED STATEME7
UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Series E Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Wecast Network, Inc. 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 | 88,745 | 88,770 | 88,770 | ||||||
Share-based compensation (in shares) | 25,000 | |||||||||
Common stock issuance | $ 4,545 | 9,273,029 | 9,277,574 | 9,277,574 | ||||||
Common stock issuance (in shares) | 4,545,455 | |||||||||
Warrants issued in connection with common stock issuance | 722,426 | 722,426 | 722,426 | |||||||
Issuance cost in connection with the issuance of common stock and warrants | (442,500) | (442,500) | (442,500) | |||||||
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 | |||||||||
Net profit (loss) | (2,136,471) | (2,136,471) | (137,569) | (2,274,040) | ||||||
Foreign currency translation adjustments, net of nil tax | 18,519 | 18,519 | (5,387) | 13,132 | ||||||
Balance at Mar. 31, 2016 | $ 7,255 | $ 28,861 | 107,229,200 | (88,594,311) | (396,391) | 18,274,614 | (2,530,987) | 15,743,627 | ||
Balance (in shares) at Mar. 31, 2016 | 7,254,997 | 28,861,344 | ||||||||
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 | [2] |
Balance (in shares) at Dec. 31, 2016 | [1] | 7,154,997 | 53,918,523 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share-based compensation | 71,428 | 71,428 | 71,428 | |||||||
Common stock issuance | $ 30 | (30) | ||||||||
Common stock issuance (in shares) | 29,585 | |||||||||
Common stock issued for warrant exercised | $ 5 | 8,740 | 8,745 | 8,745 | ||||||
Common stock issued for warrant exercised (in shares) | 5,000 | |||||||||
Common stock issued from conversion of series E preferred stock | $ (5,938) | $ 5,938 | ||||||||
Common stock issued from conversion of series E preferred stock (in shares) | (5,938,093) | 5,938,093 | ||||||||
Net profit (loss) | 2,212,879 | 2,212,879 | (574,412) | 1,638,467 | ||||||
Foreign currency translation adjustments, net of nil tax | 1,350,020 | 1,350,020 | 168,822 | 1,518,842 | ||||||
Balance at Mar. 31, 2017 | $ 1,217 | $ 59,891 | $ 152,836,057 | $ (113,456,389) | $ (3,282) | $ 39,437,494 | $ (5,731,071) | $ 33,706,423 | ||
Balance (in shares) at Mar. 31, 2017 | 1,216,904 | 59,891,201 | ||||||||
[1] | The above consolidated statements of equity present the Wecast Services Limited and Wide Angle Group Limited acquired from BT Capital Global Limited 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 4 "Acquisition") | |||||||||
[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 4 "Acquisition") |
Organization and Principal Acti
Organization and Principal Activities | 3 Months Ended |
Mar. 31, 2017 | |
Organization And Principal Activities [Abstract] | |
Organization and Principal Activities | 1. Organization and Principal Activities Wecast Network, Inc. (the “Company”), formerly known as YOU On Demand Holdings, 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 Wecast Network (“Wecast Network”, “we”, “us”, or “the Company”). Wecast Network is leveraging its legacy operations as a premium content Video On Demand (“VOD”) service provider in China and aiming to be the leading provider of total B2B business solutions for today’s constantly evolving business landscape. With a focus on “BASE” or Blockchain, Artificial Intelligence, Supply Chain & Exchanges, Wecast is organized into three cloud-based categories and business units: Brand IP Cloud, Product Sales Cloud, and the Financial Product Cloud. With the three clouds functioning both independently and interdependently, Wecast is creating a vertical, transactional and flexible platform for today’s global enterprises. The Company’s mission and vision is to be the world’s leading cloud-based, total B2B enterprise solution and platform provider that empowers businesses to grow with Big Data technology. Wecast Network launched its legacy VOD service through acquisition of YOD Hong Kong, formerly Sinotop Group Limited, in July 30, 2010 through its subsidiary China CB Cayman. Through a series of contractual arrangements, YOD WFOE, the subsidiary of YOD Hong Kong, controls Sinotop Beijing, a corporation established in the PRC. Sinotop Beijing is the 80% owner of Zhong Hai Media, through which we provide: 1) integrated value-added business-to-business (“B2B”) service solutions for the delivery of VOD and enhanced premium content for digital cable; 2) integrated value-added business-to-business-to-customer (“B2B2C”) service solutions for the delivery of VOD and enhanced premium content for IPTV and OTT providers and; 3) a direct to user, or B2C, mobile video service app. As a result of the contractual arrangements with Sinotop Beijing, we have the right to control management decisions and direct the economic activities that most significantly impact Sinotop Beijing and Zhong Hai Media, and accordingly, under generally accepted accounting principles in the United States (“U.S. GAAP”), we consolidate these operating entities in our consolidated financial statements. On October 8, 2016, the Company signed an agreement with Zhejiang Yanhua (“Yanhua Agreement”), where Zhejiang Yanhua (“Yanhua”) will act as the exclusive distribution operator (within the territory of the People’ Republic of China) of Wecast Network’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 Wecast Network 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 Wecast Network to Yanhua reaches the amount of RMB13,000,000, the revenue above RMB13,000,000 will be shared with Wecast Network from the date when this revenue threshold is reached based on certain revenue-sharing mechanism stipulated in the Yanhua Agreement. On January 30, 2017, Company entered into a Securities Purchase Agreement (the “Sun Video SPA”) with BT Capital Global Limited which has been controlled by Company’s chairman Bruno Wu, for the purchase by us of all of the outstanding capital stock of Sun Video Group Hong Kong Limited. On January 31, 2017, 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 4. After acquiring these two entities, other than Company’s legacy YOD business, Company is also engaged with consumer electronics and smart hand held device design and supply chain management business. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statements of the financial position as of March 31, 2017, results of operations for the three months ended March 31, 2017 and 2016, and cash flows for the three months ended March 31, 2017 and 2016, have been made. All significant intercompany transactions and balances are eliminated on consolidation. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission on March 31, 2017 (“2016 Annual Report”). |
Going Concern and Management's
Going Concern and Management's Plans | 3 Months Ended |
Mar. 31, 2017 | |
Going Concern And Managements Plans [Abstract] | |
Going Concern and Management's Plans | 2. Going Concern and Management’s Plans For the three months ended March 31, 2017 and 2016, the Company incurred net income of approximately $1.6 million and net loss of $2.3 million, respectively, and cash used in operations was approximately $3.4 million and $1.7 million, respectively. Further, the Company had accumulated deficit of approximately $113.5 million and $115.7 million as of March 31, 2017 and December 31, 2016, respectively, due to recurring losses since the inception of its business. 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 three 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, and with Sun Seven Stars Hong Kong Cultural Development Limited (“SSSHK”) for $2.0 million on November 17, 2016, respectively. 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 | 3 Months Ended |
Mar. 31, 2017 | |
Vie Structure And Arrangements [Abstract] | |
VIE Structure and Arrangements | 3. 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 and its subsidiary, Zhong Hai Media, which holds the licenses and approvals to provide digital distribution and Internet content services in the PRC. The Company has the ability to control Sinotop Beijing and Zhong Hai Media 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, we entered into a series of contractual agreements to give us the ability to control Sinotop Beijing with Zhang Yan, the former legal shareholder of Sinotop Beijing (the spouse of our then-CEO). In January 2016, in connection with the appointment of new CEO and in accordance with our rights under the contractual agreements, (1) the legal ownership of Sinotop Beijing was transferred from Zhang Yan to Bing Wu, the brother of our 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 our rights under contractual agreements, (1) the legal ownership of Sinotop Beijing was transferred from Bing Wu to Mei Chen, the former CFO of our 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 waived 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 or Zhong Hai Media that can be used only to settle obligations of Sinotop Beijing or Zhong Hai Media, except for the registered capital of these two entities amounting to RMB 21.8 million (approximately $3.3 million) as of March 31, 2017. As Sinotop Beijing and Zhong Hai Media are incorporated as limited liability companies under PRC Company Law, creditors of these two entities 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, 2016, 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 March 31, 2017. As SSF is incorporated as limited liability company under PRC Company Law, creditors of these two entities 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. March 31, December 31, 2017 2016 ASSETS Current assets: Cash $ 385,911 $ 1,519,125 Accounts receivable, net 1,186,291 1,260,529 Prepaid expenses 62,881 30,455 Other current assets 1,798,108 191,427 Intercompany receivables due from the Company's subsidiaries (i) 896,512 150,725 Total current assets 4,329,703 3,152,261 Property and equipment, net 206,106 196,677 Intangible assets, net 2,312 2,570 Long term investments 4,984,167 3,654,664 Other non-current assets 57,846 442,782 Total assets $ 9,580,134 $ 7,448,954 LIABILITIES Current liabilities: Accounts payable $ 1,191,076 $ 5,817 Deferred revenue 3,522 824,563 Accrued expenses 248,226 268,074 Other current liabilities 413,327 394,314 Accrued license content fees 1,189,453 1,236,661 Intercompany payables due to the Company's subsidiaries (i) 14,793,082 14,752,338 Total current liabilities 17,838,686 17,481,767 Total liabilities $ 17,838,686 $ 17,481,767 Three Months Ended March 31, March 31, 2017 2016 Revenue $ 787,328 $ 1,269,726 Net income (loss) $ 258,760 $ (479,887 ) Three Months Ended March 31, March 31, 2017 2016 Net cash used in operating activities $ (1,322,729) $ (603,884 ) Net cash used in investing activities $ - $ - Net cash provided by financing activities (i) $ 189,515 $ 21,855 (i) Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.29 million to Sinotop Beijing in the three months period ended March 31, 2017. The revenue producing assets that are held by the VIEs and a VIE’s subsidiary primarily comprise of licensed content, network equipment, software and licenses and website. Substantially all of such assets are recognized in the Company’s consolidated financial statements, except for certain Internet Content Provider licenses, internally developed software, trademarks and patent applications which were not recorded on the Company’s consolidated balance sheets as they do not meet all the capitalization criteria. The VIEs also have assembled work force for sales, marketing and operations. |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition | 4. Acquisition On January 30, 2017, we entered into a Securities Purchase Agreement (the “Sun Video SPA”) with BT Capital Global Limited, a Hong Kong company (“BT”) which has been controlled by Company’s chairman Bruno Wu, for the purchase by us 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 the 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 us the shares of our common stock or 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”), we 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 changed its name to Wecast Services Limited, and is therefore also referred to herein as Wecast Services. On January 31, 2017, we 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 us 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 the revenue and gross profit from Wide Angle in the calculation of the SVG Performance Guarantees set forth in the Sun Video SPA. 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 March 31, 2017, the Company recorded SVG note in $50 million as Company’s additional paid in capital as Company believed that Performance Guarantees would be met within 12 months of the closing, but Net Income Threshold might probably not be met within 3 years of closing. Considering the proceeds transferred was larger than carrying amounts of the net assets received, such $50 million was then recognized as reduction to Company’s additional paid in capital. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2017 | |
Accounts Receivable [Abstract] | |
Accounts Receivable | 5. Accounts Receivable Accounts receivable is consisted of the following: March 31, December 31, 2017 2016 Accounts receivable, gross: $ 32,040,818 $ 12,350,947 Less: allowance for doubtful accounts (2,844,227 ) (2,828,796 ) Accounts receivable, net $ 29,196,591 $ 9,522,151 The movement of the allowance for doubtful accounts is as follows: March 31, December 31, Balance at the beginning of the period $ (2,828,796 ) $ (3,672 ) Additions charged to bad debt expense (15,431 ) (2,825,124 ) Write-off of bad debt allowance - - Balance at the end of the period $ (2,844,227 ) $ (2,828,796 ) |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 6. Property and Equipment The following is a breakdown of the Company’s property and equipment: March 31, December 31, 2017 2016 Furniture and office equipment $ 1,070,443 $ 1,061,762 Vehicle 144,544 267,022 Office Building 3,969,632 3,948,058 Leasehold improvements 702,634 760,931 Total property and equipment 5,887,253 6,037,773 Less: accumulated depreciation (1,126,277 ) (1,074,048 ) Property and Equipment, net $ 4,760,976 $ 4,963,725 The Company recorded depreciation expense of approximately $168,082 and $34,000 for the three months ended March 31, 2017 and 2016 respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets As of March 31, 2017 and December 31, 2016, the Company’s amortizing and indefinite lived intangible assets consisted of the following: March 31, 2017 December 31, 2016 Amortizing Intangible Gross Accumulated Impairment Net Gross Accumulated Impairment Net Assets Amount Amortization Loss Balance Amount Amortization Loss Balance Charter/ Cooperation agreements (iii) $ 2,755,821 (909,257 ) (1,846,564 ) - $ 2,755,821 $ (909,257 ) $ (1,846,564 ) $ - Software and licenses 267,991 (244,585 ) - 23,406 267,991 (241,932 ) - 26,059 Patent and trademark 92,965 (39,943 ) - 53,022 92,965 (39,943 ) - 53,022 Website and mobile app development (ii) 593,193 (421,129 ) (172,064 ) - 593,193 (421,129 ) (172,064 ) - Workforce (i) 305,694 (101,898 ) - 203,796 305,694 (76,422 ) - 229,272 Total amortizing intangible assets $ 4,015,664 (1,716,812 ) (2,018,628 ) 280,224 $ 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 10,599 - - 10,599 10,599 - - 10,599 Total intangible assets $ 4,160,553 (1,716,812 ) (2,018,622 ) 425,113 $ 4,160,553 $ (1,688,683 ) $ (2,018,628 ) $ 453,242 (i) On April 1, 2016, Wecast Network entered into an agreement with Mr. Liu Changsheng, under which Wecast Network 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 enter into three year employment contracts with Wecast Network effective from 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. Cash consideration of $93,825 has been paid as of March 31, 2017, and $93,828 was paid on October 31, 2016. If any of three key staff, as defined, terminated their employment with Wecast Network during the first 12 months of employment, Wecast Network has 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. Wecast Network has accounted for the transaction as an asset acquisition in which Wecast Network 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. The Company recorded amortization expense related to our amortizing intangible assets of approximately $28,129 and $63,000 for the three months ended March 31, 2017 and March 31, 2016 respectively, which included the amortization expense of the workforce acquired as stated above. (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. . The following table outlines the amortization expense for the next five years and thereafter: Amortization to be Years ending December 31, Recognized 2017(9 months) 90,277 2018 118,254 2019 35,794 2020 and thereafter 35,899 Total amortization to be recognized $ 280,224 |
Long Term Investments
Long Term Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Long Term Investments | 8. Long Term Investments Cost method investments Cost method investments as of the period ended March 31, 2017 and December 31, 2016 are as follow: March 31, December 31, 2017 2016 Topsgame (i) $ 3,174,235 $ 3,156,985 Frequency (ii) 3,000,000 3,000,000 Total $ 6,174,235 $ 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.. (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. Equity method investments Equity method investment movement for the three months ended on March 31, 2017 is as follow: March 31, 2017 December Capital increase Gain/(Loss) Impairment loss Foreign currency March 31, Wecast Internet (i) 132,782 - (37,382 ) - 3,804 99,204 Hua Cheng (ii) 364,897 - (6,364 ) (38,448 ) 41,959 362,044 Shandong Media (iii) - - - - - - Total 497,679 - (43,746 ) (38,448 ) 45,763 461,248 (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. (ii) Investment in Hua Cheng As of the period ended March 31, 2017 and December 31, 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 period ended March 31, 2017 and December 31, 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 March 31, 2017 and December 31, 2016. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 9. 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 1,136,3654 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 12, 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. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 10. 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 at March 31, 2017 were valued using the Black-Scholes Merton method as an estimate for the Monte Carlos Simulation method which was the method used at the year ended December 31, 2016. The following assumptions were incorporated: Black Scholes Monte Carlo March 31, December 31, 2017 2016 Risk-free interest rate 0.91 % 0.70 % Expected volatility 55 % 55 % Expected term 0.42 year 0.67 year Expected dividend yield 0 % 0 % The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016, respectively: March 31, 2017 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Liabilities Warrant liabilities (see Note 13) $ - $ - $ 340,901 $ 340,901 December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Liabilities Warrant liabilities (see Note 13) $ - $ - $ 70,785 $ 70,785 The table below reflects the components effecting the change in fair value for the three months ended March 31, 2017: Level 3 Assets and Liabilities For the Three Months Ended March 31 , 2017 January 1, Change in March 31, 2017 Settlements Fair Value 2017 Liabilities: Warrant liabilities (see Note 13) $ 70,785 $ - $ 270,116 $ 340,901 The significant unobservable inputs used in the fair value measurement of the Company’s warrant 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 payables and convertible promissory note as of March 31, 2017 and December 31, 2016, approximate fair value because of the short maturity of these instruments. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions (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. For the three months ended March 31, 2017 and 2016, the Company recorded interest expense of $30,000 and $30,000 related to the Note. (b) Cost of revenue Hua Cheng, the minority shareholder of Zhong Hai Media, charged Company licensed content fees of approximately nil and $56,000 for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017 and December 31, 2016, total accrued license fees due to Hua Cheng amounted to nil and $54,000, 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 8 above. (d) Short term entrust loans During the first quarter of 2017, the company entered into a series of entrust loans with the entities controlled by Bruno Wu to obtain short-term financial support for the Company’s daily operation. As of March 31, 2017 and December 31, 2016, the Company had such borrowings in the amount of $2,173,891 and nil, respectively. As of the date of this report, all of such entrust loans have been paid back to related parties. (e) 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 March 31, 2017, the transaction has already been closed, and all of the deposit paid to MYP has been transferred into liabilitydue to BT, which is the former shareholder of SVG. |
SSS Agreements
SSS Agreements | 3 Months Ended |
Mar. 31, 2017 | |
Sss Agreements [Abstract] | |
SSS Agreements | 12. 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 Wecast Network 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 December 31, 2016. |
Warrant Liabilities
Warrant Liabilities | 3 Months Ended |
Mar. 31, 2017 | |
Warrant Liabilities [Abstract] | |
Warrant Liabilities | 13. 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, the warrants have been accounted as derivative liabilities to be re-measured at the end of every reporting period with the change in fair value reported in the consolidated statement of operations. On August 30, 2012, such warrants were valued at $1,525,000 utilizing a valuation model and were initially recorded as a liability. The fair value of the warrants are remeasured at each reporting period based on the Monte Carlo valuation. As of March 31, 2017 and December 31, 2016, the warrant liability was re-valued as disclosed in Note 10, and recorded at its fair value of approximately $340,901 and $70,785, respectively, resulting in a loss of approximately $270,116 for the three months ended March 31, 2017. There were no warrants exercised during three months ended March 31, 2017. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Share-Based Payments | 14. Share-Based Payments As of March 31, 2017, the Company had 2,251,428 options and 3,778,002 warrants outstanding (including the 1,818,182 warrants issued to SSS as disclosed in Note 12 (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 Total share-based payments expense recorded by the Company during the three months ended March 31, 2017 and 2016 is as follows: Three Months Ended March 31 March 31 2017 2016 Employees and directors share-based payments $ 71,428 $ 139,000 Effective as of December 3, 2010, our Board of Directors approved the Wecast Network, Inc. 2010 Stock Incentive Plan (“the 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 March 31, 2017, options available for issuance are 1,069,465 shares. (a) Stock Options Stock option activity for the three months ended March 31, 2017 is summarized as follows: Weighted Average Remaining Aggregated Options Weighted Average Contractual Life Intrinsic Outstanding Exercise Price (Years) Value Outstanding at January 1, 2017 2,101,428 $ 2.42 4.59 - Granted 150,000 1.62 Exercised - Expired - Forfeited - Outstanding at March 31, 2017 2,251,428 2.33 4.67 - Vested and expected to vest as of March 31, 2017 2,251,428 2.33 4.67 - Options exercisable at March 31, 2017 (vested) 1,687,051 2.80 3.38 - On January 4, 2017 and March 1 and March 16, 2017, 70,000, 45,000 and 35,000 shares stock options, respectively, were issued to certain employees 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 $47,415, $45,443 and $36,750, respectively. The following table summarizes the assumptions used to estimate the fair values of the share options granted in the three months ended March 31, 2017 presented: Black Scholes Risk-free interest rate 2.26% ~ 2.34 % Expected volatility 55 % Expected term 5.88 years Expected dividend yield 0 % As of March 31, 2017, approximately $501,000 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 2.40 years. The total fair value of shares vested during the three months ended March 31, 2017 and 2016 was approximately nil and $16,000, respectively. (b) Warrants In connection with the Company’s financings, the Warner Brother Agreement and the service agreements, the Company issued warrants to service providers to purchase common stock of the Company. As of March 31, 2017, the weighted average exercise price of the warrants was $2.20 and the weighted average remaining life was 1.19 years. The following table outlines the warrants outstanding and exercisable as of March 31, 2017 and December 31, 2016: March 31, December 31, 2017 2016 Number of Number of Warrants Warrants Warrants Outstanding Outstanding and Outstanding and Exercise Expiration 2012 August Financing Warrants (i) 536,250 536,250 $ 1.50 08/30/17 2013 Broker Warrants (Series D Financing) 223,571 228,571 $ 1.75 07/05/18 2013 Broker Warrants (Convertible Note) 114,285 114,285 $ 1.75 11/04/18 2014 Broker Warrants (Series E Financing) 1,085,714 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 3,778,002 3,783,002 (i) The warrants are classified as derivative liabilities as disclosed in Note 13. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 15. Earnings (Loss) Per Common Share March 31, March 31, 2017 2016 Basic Diluted Basic Diluted Net earnings/(loss) attributable to common stockholders 2,212,879 2,212,879 (2,136,471 ) (2,136,471 ) Average equivalent shares Weighted-average common shares outstanding 55,382,002 55,382,002 24,484,562 24,484,562 Convertible preferred shares - 2,150,237 - - Dilutive effect of convertible promissory notes - 3,183,482 - - Total average equivalent shares 55,382,002 60,715,721 24,484,562 24,484,562 Earnings/(loss) per common share 0.04 0.04 (0.09 ) (0.09 ) Basic earnings (loss) per common share attributable to Wecast Network shareholders is calculated by dividing the net earnings (loss) attributable to Wecast Network shareholders by the weighted average number of outstanding common shares during the applicable period. Diluted earnings (loss) per share is calculated by taking net earnings (loss), divided by the diluted weighted average common shares outstanding. Diluted loss per share for the three months ended March 31, 2016 equals basic loss per share because the effect of securities convertible into common shares is anti-dilutive. For the three months ended March 31, 2017 and 2016, the number of securities convertible into common shares not included in diluted loss per common share because the effect would have been anti-dilutive consists of the following: March 31, March 31, 2017 2016 Warrants 3,778,002 4,009,669 Options 2,251,428 1,722,325 Series A Preferred Stock — 933,333 Series E Preferred Stock — 7,254,997 Convertible promissory note and interest — 11,190,292 Total 6,029,430 25,110,616 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 16. Income Taxes As of March 31, 2017, the Company had approximately $28.9 million of the U.S domestic cumulative tax loss carryforwards and approximately $17.5 million of the foreign cumulative tax loss carryforwards, which may be available to reduce future income tax liabilities in certain jurisdictions. These U.S. and foreign tax loss carryforwards will expire beginning year 2028 through 2036 and year 2018 to year 2022, respectively. The income tax expense for the three months ended March 31, 2017 is nil because net operating loss carryovers offset current taxable income and deferred tax assets related to the net operating loss carryovers utilized had been offset by a valuations allowance. Company had established a 100% valuation allowance against its net deferred tax assets due to its history of pre-tax losses and the likelihood that the deferred tax assets will not be realized. The valuation allowance was decreased approximately $0.4 million during the three months ended March 31, 2017. As of March 31, 2017, there are no unrecorded tax benefits which would impact our financial position or our results of operations. |
Contingencies and Commitments
Contingencies and Commitments | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | 17. Contingencies and Commitments (a) Operating Lease Commitment The Company is committed to paying leased property costs related to our offices in China as follows: Leased Property Years ending December 31, Costs 2017(9 months) 235,000 2018 266,000 2019 193,000 2020 199,000 Thereafter 84,000 Total $ 977,000 (b) Licensed Content Commitment The Company is committed to paying content costs through 2019 as follows: Years ending December 31, Content Costs 2017 (9 months) 1,454,000 2018 217,000 2019 217,000 Total $ 1,888,000 (c) 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 March 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. (d) Acquisition of Property Commitment In consideration of the Company’s business expansion and rising rental costs, in February 2016, the Company entered into an agreement with Beijing Kuntin Taiming Investment Management Co., Ltd. for purchase of an office building. Total consideration for the property acquisition was RMB27.4 million (approximately $4,239,000), which the Company has paid RMB20.5 million (approximately $3,247,000) at the end of first quarter of 2017 and is committed to paying the remaining balance in 2017 as follows: Years ending December 31, Property 2017 (9 months) 992,000 Total $ 992,000 (e) Advertising and Marketing Expense Commitment The Company is committed to paying advertising and marketing expense through 2016 as follows: Years ending December 31, Marketing expenses 2017 (9 months) 106,000 Total $ 106,000 |
Concentration, Credit and Other
Concentration, Credit and Other Risks | 3 Months Ended |
Mar. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration, Credit and Other Risks | 18. 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 Zhong Hai Media, which the Company controls as a result of a series of contractual arrangements entered among YOD WFOE, Sinotop Beijing as the parent company of Zhong Hai Media, 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 impacted 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 March 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 the first three months ended March 31, 2017 based on the relative fair value of licensed content delivered to Yanhua. For the three months ended March 31, 2016, two customers individually accounted for more than 10% of the Company’s revenue. Four customers individually accounted for 10% of the Company’s net accounts receivables as of March 31, 2016. Wecast Services The holdings and businesses from Company’s two acquisitions in January (Note 4) now reside under “Wecast Services”, our whollyowned subsidiary Wecast Services 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 three months ended March 31, 2017, one customer individually accounted for more than 10% of the Company’s revenue. Three customers individually accounted for more than 10% of the Company’s net accounts receivables as of March 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 12). For the three months ended March 31, 2016, four suppliers individually accounted for more than 10% of the Company’s cost of revenues. Two suppliers individually accounted for 10% of the Company’s accounts payable as of March 31, 2016. Wecast Services The Company relies on agreements with consumer electronics manufactures. For the three months ended March 31, 2017, two suppliers individually accounted for more than 10% of the Company’s cost of revenues. One supplier individually accounted for more than 10% of the Company’s accounts payable as of March 31, 2017. (d) Concentration of Credit Risks Financial instruments that potentially subject the Company to significant concentration of credit risk primarily consist of cash and accounts receivable. As of March 31, 2017 and December 31, 2016, the Company’s cash was held by financial institutions located in the PRC, Hong Kong and the United States that management believes have acceptable credit. Accounts receivable are typically unsecured and are mainly derived from revenues from the Company’s VOD content distribution partners, and smart sales products 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: March 31, December 31, 2017 2016 RMB denominated bank deposits with financial institutions in the PRC $ 474,523 1,566,107 US dollar denominated bank deposits with financial institutions in the PRC $ 177,570 670,951 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) 38,635 14,163 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 296,197 1,403,000 US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 58,637 95,030 As of March 31, 2017 and December 31, 2016 deposits of $371,824 and $384,515 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 and Cayman with acceptable credit rating. |
Defined Contribution Plan
Defined Contribution Plan | 3 Months Ended |
Mar. 31, 2017 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |
Defined Contribution Plan | 19. Defined Contribution Plan 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 $1,233 and $1,000 for the three months ended March 31, 2017 and March 31, 2016 respectively. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | 20. 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. 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 4), the Company has operated two segments based on different clouds that major business reside in, including Legacy YOD segement and Wecast Service segment. Therefore, there are two reportable segments for the three months ended March 31, 2017. The two reportable segments are: Legacy YOD Wecast Service Segment disclosures are on a performance basis consistent with internal management reporting. The following tables summarized the Company’s revenue and cost generated from different revenue streams. Three Months Ended March 31, March 31, 2017 2016 NET SALES TO EXTERNAL CUSTOMERS -Legacy YOD $ 787,328 $ 1,269,726 -Wecast Service 32,377,023 - Net sales 33,164,351 1,269,726 GROSS PROFIT -Legacy YOD 27,493 353,946 -Wecast Service 3,794,479 - Gross profit 3,821,972 353,946 March 31, December 31, 2017 2016 TOTAL ASSETS -Legacy YOD $ 35,955,219 $ 36,975,911 -Wecast Service 33,714,959 14,448,702 -Unallocated assets 4,181,904 4,321,677 -Intersegment elimination (203,033) - Total 73,649,049 55,746,290 |
VIE Structure and Arrangements
VIE Structure and Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Vie Structure And Arrangements [Abstract] | |
Schedule of consolidated financial statements | March 31, December 31, 2017 2016 ASSETS Current assets: Cash $ 385,911 $ 1,519,125 Accounts receivable, net 1,186,291 1,260,529 Prepaid expenses 62,881 30,455 Other current assets 1,798,108 191,427 Intercompany receivables due from the Company's subsidiaries (i) 896,512 150,725 Total current assets 4,329,703 3,152,261 Property and equipment, net 206,106 196,677 Intangible assets, net 2,312 2,570 Long term investments 4,984,167 3,654,664 Other non-current assets 57,846 442,782 Total assets $ 9,580,134 $ 7,448,954 LIABILITIES Current liabilities: Accounts payable $ 1,191,076 $ 5,817 Deferred revenue 3,522 824,563 Accrued expenses 248,226 268,074 Other current liabilities 413,327 394,314 Accrued license content fees 1,189,453 1,236,661 Intercompany payables due to the Company's subsidiaries (i) 14,793,082 14,752,338 Total current liabilities 17,838,686 17,481,767 Total liabilities $ 17,838,686 $ 17,481,767 Three Months Ended March 31, March 31, 2017 2016 Revenue $ 787,328 $ 1,269,726 Net income (loss) $ 258,760 $ (479,887 ) Three Months Ended March 31, March 31, 2017 2016 Net cash used in operating activities $ (1,322,729) $ (603,884 ) Net cash used in investing activities $ - $ - Net cash provided by financing activities (i) $ 189,515 $ 21,855 (i) Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.29 million to Sinotop Beijing in the three months period ended March 31, 2017. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 21. Subsequent Event As at May 15, 2017 (reporting date approved by Board of Directors), there is no material subsequent event to be disclosed. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounts Receivable [Abstract] | |
Schedule of accounts receivable | March 31, December 31, 2017 2016 Accounts receivable, gross: $ 32,040,818 $ 12,350,947 Less: allowance for doubtful accounts (2,844,227 ) (2,828,796 ) Accounts receivable, net $ 29,196,591 $ 9,522,151 |
Schedule of movement in allowance for doubtful accounts receivable | March 31, December 31, Balance at the beginning of the period $ (2,828,796 ) $ (3,672 ) Additions charged to bad debt expense (15,431 ) (2,825,124 ) Write-off of bad debt allowance - - Balance at the end of the period $ (2,844,227 ) $ (2,828,796 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, December 31, 2017 2016 Furniture and office equipment $ 1,070,443 $ 1,061,762 Vehicle 144,544 267,022 Office Building 3,969,632 3,948,058 Leasehold improvements 702,634 760,931 Total property and equipment 5,887,253 6,037,773 Less: accumulated depreciation (1,126,277 ) (1,074,048 ) Property and Equipment, net $ 4,760,976 $ 4,963,725 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of amortizing and indefinite lived intangible assets | March 31, 2017 December 31, 2016 Amortizing Intangible Gross Accumulated Impairment Net Gross Accumulated Impairment Net Assets Amount Amortization Loss Balance Amount Amortization Loss Balance Charter/ Cooperation agreements (iii) $ 2,755,821 (909,257 ) (1,846,564 ) - $ 2,755,821 $ (909,257 ) $ (1,846,564 ) $ - Software and licenses 267,991 (244,585 ) - 23,406 267,991 (241,932 ) - 26,059 Patent and trademark 92,965 (39,943 ) - 53,022 92,965 (39,943 ) - 53,022 Website and mobile app development (ii) 593,193 (421,129 ) (172,064 ) - 593,193 (421,129 ) (172,064 ) - Workforce (i) 305,694 (101,898 ) - 203,796 305,694 (76,422 ) - 229,272 Total amortizing intangible assets $ 4,015,664 (1,716,812 ) (2,018,628 ) 280,224 $ 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 10,599 - - 10,599 10,599 - - 10,599 Total intangible assets $ 4,160,553 (1,716,812 ) (2,018,622 ) 425,113 $ 4,160,553 $ (1,688,683 ) $ (2,018,628 ) $ 453,242 (i) On April 1, 2016, Wecast Network entered into an agreement with Mr. Liu Changsheng, under which Wecast Network 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 enter into three year employment contracts with Wecast Network effective from 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. Cash consideration of $93,825 has been paid as of March 31, 2017, and $93,828 was paid on October 31, 2016. If any of three key staff, as defined, terminated their employment with Wecast Network during the first 12 months of employment, Wecast Network has 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. Wecast Network has accounted for the transaction as an asset acquisition in which Wecast Network 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. The Company recorded amortization expense related to our amortizing intangible assets of approximately $28,129 and $63,000 for the three months ended March 31, 2017 and March 31, 2016 respectively, which included the amortization expense of the workforce acquired as stated above. (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. |
Schedule of amortization expense for the next five years | Amortization to be Years ending December 31, Recognized 2017(9 months) 90,277 2018 118,254 2019 35,794 2020 and thereafter 35,899 Total amortization to be recognized $ 280,224 |
Long Term Investments (Tables)
Long Term Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of cost method investments | March 31, December 31, 2017 2016 Topsgame (i) $ 3,174,235 $ 3,156,985 Frequency (ii) 3,000,000 3,000,000 Total $ 6,174,235 $ 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.. (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. |
Schedule of long term investment under equity method | March 31, 2017 December Capital increase Gain/(Loss) Impairment loss Foreign currency March 31, Wecast Internet (i) 132,782 - (37,382 ) - 3,804 99,204 Hua Cheng (ii) 364,897 - (6,364 ) (38,448 ) 41,959 362,044 Shandong Media (iii) - - - - - - Total 497,679 - (43,746 ) (38,448 ) 45,763 461,248 (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. (ii) Investment in Hua Cheng As of the period ended March 31, 2017 and December 31, 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 period ended March 31, 2017 and December 31, 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 March 31, 2017 and December 31, 2016. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assumptions for estimating fair value of warrant liabilities | Black Scholes Monte Carlo March 31, December 31, 2017 2016 Risk-free interest rate 0.91 % 0.70 % Expected volatility 55 % 55 % Expected term 0.42 year 0.67 year Expected dividend yield 0 % 0 % |
Schedule of assets and liabilities measured at fair value on a recurring basis | March 31, 2017 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Liabilities Warrant liabilities (see Note 13) $ - $ - $ 340,901 $ 340,901 December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Liabilities Warrant liabilities (see Note 13) $ - $ - $ 70,785 $ 70,785 |
Schedule of components effecting the change in fair value | Level 3 Assets and Liabilities For the Three Months Ended March 31 , 2017 January 1, Change in March 31, 2017 Settlements Fair Value 2017 Liabilities: Warrant liabilities (see Note 13) $ 70,785 $ - $ 270,116 $ 340,901 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of share-based payments expense | Three Months Ended March 31 March 31 2017 2016 Employees and directors share-based payments $ 71,428 $ 139,000 |
Schedule of stock option activity | Weighted Average Remaining Aggregated Options Weighted Average Contractual Life Intrinsic Outstanding Exercise Price (Years) Value Outstanding at January 1, 2017 2,101,428 $ 2.42 4.59 - Granted 150,000 1.62 Exercised - Expired - Forfeited - Outstanding at March 31, 2017 2,251,428 2.33 4.67 - Vested and expected to vest as of March 31, 2017 2,251,428 2.33 4.67 - Options exercisable at March 31, 2017 (vested) 1,687,051 2.80 3.38 - |
Schedule of assumptions used to estimate the fair values of the share options | Black Scholes Risk-free interest rate 2.26% ~ 2.34 % Expected volatility 55 % Expected term 5.88 years Expected dividend yield 0 % |
Schedule of warrants outstanding and exercisable | March 31, December 31, 2017 2016 Number of Number of Warrants Warrants Warrants Outstanding Outstanding and Outstanding and Exercise Expiration 2012 August Financing Warrants (i) 536,250 536,250 $ 1.50 08/30/17 2013 Broker Warrants (Series D Financing) 223,571 228,571 $ 1.75 07/05/18 2013 Broker Warrants (Convertible Note) 114,285 114,285 $ 1.75 11/04/18 2014 Broker Warrants (Series E Financing) 1,085,714 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 3,778,002 3,783,002 (i) The warrants are classified as derivative liabilities as disclosed in Note 13. |
Earnings (Loss) Per Common Sh36
Earnings (Loss) Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of number of securities convertible into common shares | March 31, March 31, 2017 2016 Basic Diluted Basic Diluted Net earnings/(loss) attributable to common stockholders 2,212,879 2,212,879 (2,136,471 ) (2,136,471 ) Average equivalent shares Weighted-average common shares outstanding 55,382,002 55,382,002 24,484,562 24,484,562 Convertible preferred shares - 2,150,237 - - Dilutive effect of convertible promissory notes - 3,183,482 - - Total average equivalent shares 55,382,002 60,715,721 24,484,562 24,484,562 Earnings/(loss) per common share 0.04 0.04 (0.09 ) (0.09 ) |
Schedule of authorized but unissued common stock for possible future issuance | March 31, March 31, 2017 2016 Warrants 3,778,002 4,009,669 Options 2,251,428 1,722,325 Series A Preferred Stock — 933,333 Series E Preferred Stock — 7,254,997 Convertible promissory note and interest — 11,190,292 Total 6,029,430 25,110,616 |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of operating lease commitment | Leased Property Years ending December 31, Costs 2017(9 months) 235,000 2018 266,000 2019 193,000 2020 199,000 Thereafter 84,000 Total $ 977,000 |
Schedule of licensed content commitment | Years ending December 31, Content Costs 2017 (9 months) 1,454,000 2018 217,000 2019 217,000 Total $ 1,888,000 |
Schedule of acquisition of property commitment | Years ending December 31, Property 2017 (9 months) 992,000 Total $ 992,000 |
Schedule of advertising and marketing expense commitment | Years ending December 31, Marketing expenses 2017 (9 months) 106,000 Total $ 106,000 |
Concentration, Credit and Oth38
Concentration, Credit and Other Risks (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Schedule of demand deposits | March 31, December 31, 2017 2016 RMB denominated bank deposits with financial institutions in the PRC $ 474,523 1,566,107 US dollar denominated bank deposits with financial institutions in the PRC $ 177,570 670,951 HKD denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) 38,635 14,163 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) $ 296,197 1,403,000 US dollar denominated bank deposits with financial institutions in The United States of America (“USA”) $ 58,637 95,030 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three Months Ended March 31, March 31, 2017 2016 NET SALES TO EXTERNAL CUSTOMERS -Legacy YOD $ 787,328 $ 1,269,726 -Wecast Service 32,377,023 - Net sales 33,164,351 1,269,726 GROSS PROFIT -Legacy YOD 27,493 353,946 -Wecast Service 3,794,479 - Gross profit 3,821,972 353,946 March 31, December 31, 2017 2016 TOTAL ASSETS -Legacy YOD $ 35,955,219 $ 36,975,911 -Wecast Service 33,714,959 14,448,702 -Unallocated assets 4,181,904 4,321,677 -Intersegment elimination (203,033) - Total 73,649,049 55,746,290 |
Organization and Principal Ac40
Organization and Principal Activities (Detail Textuals) | Oct. 08, 2016CNY (¥) | Mar. 31, 2017Unit | Jan. 31, 2017 |
Organization And Principal Activities [Line Items] | |||
Number of cloud-based categories and business units | Unit | 3 | ||
Wide Angle Group Limited | BT Capital Global Limited | |||
Organization And Principal Activities [Line Items] | |||
Percentage of ownership of shares to be purchase | 55.00% | ||
Yanhua Agreement | |||
Organization And Principal Activities [Line Items] | |||
Minimal guarantee fee | ¥ 13,000,000 | ||
Total price of the existing agreement to be transferred | ¥ 13,000,000 |
Going Concern and Management'41
Going Concern and Management's Plans (Detail Textuals) - USD ($) | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | [1] | |
Going Concern And Managements Plans [Abstract] | ||||
Net income (loss) | $ 1,638,467 | $ (2,274,040) | ||
Cash used in operations | (3,386,146) | $ (1,732,216) | ||
Accumulated deficit | $ (113,456,389) | $ (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 4 "Acquisition") |
Going Concern and Management'42
Going Concern and Management's Plans (Detail Textuals 1) - USD ($) | Nov. 11, 2016 | Aug. 11, 2016 | Jul. 06, 2016 | Mar. 28, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Going Concern And Managements Plans [Line Items] | ||||||
Common stock financing | $ 10,000,000 | $ 9,277,574 | ||||
Common Stock Purchase Agreement | Seven Stars Works Co., Ltd | ||||||
Going Concern And Managements Plans [Line Items] | ||||||
Common stock financing | $ 4,000,000 | |||||
Common Stock Purchase Agreement | Harvest Alternative Investment Opportunities SPC | ||||||
Going Concern And Managements Plans [Line Items] | ||||||
Common stock financing | $ 4,000,000 | |||||
Common Stock Purchase Agreement | Sun Seven Stars Hong Kong Cultural Development Limited ("SSSHK") | ||||||
Going Concern And Managements Plans [Line Items] | ||||||
Common stock financing | $ 2,000,000 |
VIE Structure and Arrangement43
VIE Structure and Arrangements (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | ||
Current assets: | ||||||
Cash | $ 1,054,142 | $ 3,761,814 | [1] | $ 12,035,320 | $ 3,768,897 | |
Accounts receivable, net | 29,196,591 | 9,522,151 | [1] | |||
Prepaid expenses | 347,968 | 375,944 | [1] | |||
Other current assets | 6,925,012 | 3,581,822 | [1] | |||
Total current assets | 39,045,586 | 19,319,577 | [1] | |||
Property and equipment, net | 4,760,976 | 4,963,725 | [1] | |||
Intangible assets, net | 425,113 | 453,242 | [1] | |||
Long term investments | 6,635,483 | 6,654,664 | [1] | |||
Other non-current assets | 57,846 | 112,643 | [1] | |||
Total assets | 73,649,049 | 55,746,290 | [1] | |||
Current liabilities: | ||||||
Accounts payable | 27,231,787 | 13,341,680 | [1] | |||
Deferred revenue | 609,466 | 1,350,054 | [1] | |||
Accrued other expenses | 1,415,774 | 708,987 | [1] | |||
Other current liabilities | 331,719 | 1,995,297 | [1] | |||
Accrued license content fees | 1,189,453 | 1,236,661 | [1] | |||
Total current liabilities | 38,680,631 | 24,015,354 | [1] | |||
Total liabilities | 38,680,631 | 24,015,354 | [1] | |||
VIE | ||||||
Current assets: | ||||||
Cash | 385,911 | 1,519,125 | ||||
Accounts receivable, net | 1,186,291 | 1,260,529 | ||||
Prepaid expenses | 62,881 | 30,455 | ||||
Other current assets | 1,798,108 | 191,427 | ||||
Intercompany receivables due from the Company's subsidiaries | [2] | 896,512 | 150,725 | |||
Total current assets | 4,329,703 | 3,152,261 | ||||
Property and equipment, net | 206,106 | 196,677 | ||||
Intangible assets, net | 2,312 | 2,570 | ||||
Long term investments | 4,984,167 | 3,654,664 | ||||
Other non-current assets | 57,846 | 442,782 | ||||
Total assets | 9,580,134 | 7,448,954 | ||||
Current liabilities: | ||||||
Accounts payable | 1,191,076 | 5,817 | ||||
Deferred revenue | 3,522 | 824,563 | ||||
Accrued other expenses | 248,226 | 268,074 | ||||
Other current liabilities | 413,327 | 394,314 | ||||
Accrued license content fees | 1,189,453 | 1,236,661 | ||||
Intercompany payables due to the Company's subsidiaries | [2] | 14,793,082 | 14,752,338 | |||
Total current liabilities | 17,838,686 | 17,481,767 | ||||
Total liabilities | $ 17,838,686 | $ 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 4 "Acquisition") | |||||
[2] | Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.29 million to Sinotop Beijing in the three months period ended March 31, 2017. |
VIE Structure and Arrangement44
VIE Structure and Arrangements (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Variable Interest Entity [Line Items] | ||
Revenue | $ 33,164,351 | $ 1,269,726 |
Net income (loss) | 2,212,879 | (2,136,471) |
VIE | ||
Variable Interest Entity [Line Items] | ||
Revenue | 787,328 | 1,269,726 |
Net income (loss) | $ 258,760 | $ (479,887) |
VIE Structure and Arrangement45
VIE Structure and Arrangements (Details 2) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Variable Interest Entity [Line Items] | |||
Net cash used in operating activities | $ (3,386,146) | $ (1,732,216) | |
Net cash used in investing activities | (5,473) | ||
Net cash provided by financing activities | 8,745 | 10,000,000 | |
VIE | |||
Variable Interest Entity [Line Items] | |||
Net cash used in operating activities | (1,322,729) | (603,884) | |
Net cash used in investing activities | |||
Net cash provided by financing activities | [1] | $ 189,515 | $ 21,855 |
[1] | Intercompany receivables and payables are eliminated upon consolidation. The intercompany financing activities include the capital injection of $0.29 million to Sinotop Beijing in the three months period ended March 31, 2017. |
VIE Structure and Arrangement46
VIE Structure and Arrangements (Detail Textuals) $ in Thousands, ¥ in Millions | Apr. 05, 2016CNY (¥) | Mar. 31, 2017USD ($) | Mar. 31, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Jan. 31, 2016USD ($) | Jan. 31, 2016CNY (¥) |
SSF | |||||||
Variable Interest Entity [Line Items] | |||||||
Capital injection to SSF | $ 290 | ||||||
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] | |||||||
Contribution of equity ownership | 100.00% | 100.00% | |||||
Contractual agreements | Sinotop Beijing | YOD WFOE | |||||||
Variable Interest Entity [Line Items] | |||||||
Registered capital | 3,300 | ¥ 21.8 | ¥ 21.8 | ||||
Contractual agreements | SSF | YOD WFOE | |||||||
Variable Interest Entity [Line Items] | |||||||
Registered capital | $ 4,200 | ¥ 27.6 | $ 7,500 | ¥ 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 | Maximum | YOD WFOE | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of service fee received | 30.00% | 30.00% | |||||
Technical service agreement | SSF | Minimum | YOD WFOE | |||||||
Variable Interest Entity [Line Items] | |||||||
Percentage of service fee received | 20.00% | 20.00% | |||||
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 | ||||||
Loan Agreement | YOD WFOE | |||||||
Variable Interest Entity [Line Items] | |||||||
Loans payable | ¥ | ¥ 19.8 | ||||||
Loan Agreement | Yun Zhu | |||||||
Variable Interest Entity [Line Items] | |||||||
Loans payable | |||||||
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 | $ 4,200 | 27.6 | |||||
Loans payable | 4,200 | ¥ 27.6 | |||||
Loan Agreement | SSF | Yun Zhu | |||||||
Variable Interest Entity [Line Items] | |||||||
Loans payable |
Acquisition (Detail Textuals)
Acquisition (Detail Textuals) - USD ($) | 1 Months Ended | ||
Jan. 30, 2017 | Mar. 31, 2017 | Jan. 31, 2017 | |
Business Acquisition [Line Items] | |||
Principal amount of convertible note | $ 50,000,000 | ||
Reduction to additional paid in capital due to SVG note | $ 50,000,000 | ||
Sun Video Group HK Limited | BT Capital Global Limited | |||
Business Acquisition [Line Items] | |||
Cash consideration for exchange | $ 800,000 | ||
Principal amount of convertible note | $ 50,000,000 | ||
Conversion price of note convertible into preferred stock shares | $ 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 | BT Capital Global Limited | |||
Business Acquisition [Line Items] | |||
Percentage of ownership of shares to be purchase | 55.00% |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | |
Accounts Receivable [Abstract] | |||
Accounts receivable, gross: | $ 32,040,818 | $ 12,350,947 | |
Less: allowance for doubtful accounts | (2,844,227) | (2,828,796) | |
Accounts receivable, net | $ 29,196,591 | $ 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 4 "Acquisition") |
Accounts Receivable (Details 1)
Accounts Receivable (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at the beginning of the period | $ (2,828,796) | $ (3,672) |
Additions charged to bad debt expense | (15,431) | (2,825,124) |
Write-off of bad debt allowance | ||
Balance at the end of the period | $ (2,844,227) | $ (2,828,796) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 5,887,253 | $ 6,037,773 | |
Less: accumulated depreciation | (1,126,277) | (1,074,048) | |
Property and Equipment, net | 4,760,976 | 4,963,725 | [1] |
Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 1,070,443 | 1,061,762 | |
Vehicle | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 144,544 | 267,022 | |
Office Building | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 3,969,632 | 3,948,058 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 702,634 | $ 760,931 | |
[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 4 "Acquisition") |
Property and Equipment (Detail
Property and Equipment (Detail Textuals) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 168,082 | $ 34,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | ||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, gross carrying amount | $ 4,015,664 | $ 4,015,664 | ||
Total amortizing intangible assets, accumulated amortization | (1,716,812) | (1,688,683) | ||
Total amortizing intangible assets, impairment loss | (2,018,622) | (2,018,628) | ||
Total amortizing intangible assets, net balance | 280,224 | 308,353 | ||
Total intangible assets, gross carrying amount | 4,160,553 | 4,160,553 | ||
Total intangible assets, accumulated amortization | (1,716,811) | (1,688,684) | ||
Total intangible assets, impairment loss | (2,018,628) | (2,018,628) | ||
Total intangible assets, net balance | 425,113 | 453,242 | [1] | |
Website name | ||||
Intangible Assets [Line Items] | ||||
Indefinite lived intangible assets, carrying amount | 134,290 | 134,290 | ||
Total intangible assets, accumulated amortization | ||||
Total intangible assets, impairment loss | ||||
Total intangible assets, net balance | 134,290 | 134,290 | ||
Patent | ||||
Intangible Assets [Line Items] | ||||
Indefinite lived intangible assets, carrying amount | 10,599 | 10,599 | ||
Total intangible assets, accumulated amortization | ||||
Total intangible assets, impairment loss | ||||
Total intangible assets, net balance | 10,599 | 10,599 | ||
Charter/ Cooperation agreements | ||||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, gross carrying amount | [2] | 2,755,821 | 2,755,821 | |
Total amortizing intangible assets, accumulated amortization | [2] | (909,257) | (909,257) | |
Total amortizing intangible assets, impairment loss | [2] | (1,846,564) | (1,846,564) | |
Total amortizing intangible assets, net balance | [2] | |||
Software and licenses | ||||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, gross carrying amount | 267,991 | 267,991 | ||
Total amortizing intangible assets, accumulated amortization | (244,585) | (241,932) | ||
Total amortizing intangible assets, impairment loss | ||||
Total amortizing intangible assets, net balance | 23,406 | 26,059 | ||
Patent And Trademark | ||||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, gross carrying amount | 92,965 | 92,965 | ||
Total amortizing intangible assets, accumulated amortization | (39,943) | (39,943) | ||
Total amortizing intangible assets, impairment loss | ||||
Total amortizing intangible assets, net balance | 53,022 | 53,022 | ||
Website and mobile app development | ||||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, gross carrying amount | [3] | 593,193 | 593,193 | |
Total amortizing intangible assets, accumulated amortization | [3] | (421,129) | (421,129) | |
Total amortizing intangible assets, impairment loss | [3] | (172,064) | (172,064) | |
Total amortizing intangible assets, net balance | [3] | |||
Workforce | ||||
Intangible Assets [Line Items] | ||||
Total amortizing intangible assets, gross carrying amount | [4] | 305,694 | 305,694 | |
Total amortizing intangible assets, accumulated amortization | [4] | (101,898) | (76,422) | |
Total amortizing intangible assets, impairment loss | [4] | |||
Total amortizing intangible assets, net balance | [4] | $ 203,796 | $ 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 4 "Acquisition") | |||
[2] | 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. | |||
[3] | Considering a new mobile app is being developed to be put into market in October, 2016, the Company determined that the future cash flows genereated 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 March 31, 2017 and December 31, 2016. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from mobile app development of $172,000 was recognized in 2016 to write off the entire book value of the old mobile app. | |||
[4] | On April 1, 2016, Wecast Network entered into an agreement with Mr. Liu Changsheng, under which Wecast Network 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 enter into three year employment contracts with Wecast Network effective from 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. Cash consideration of $93,825 has been paid as of March 31, 2017, and $93,828 was paid on October 31, 2016. If any of three key staff, as defined, terminated their employment with Wecast Network during the first 12 months of employment, Wecast Network has 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. Wecast Network has accounted for the transaction as an asset acquisition in which Wecast Network 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. The Company recorded amortization expense related to our amortizing intangible assets of approximately $28,128 and $62,193 for the three months ended March 31, 2017 and March 31, 2016 respectively, which included the amortization expense of the workforce acquired as stated above. |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2017(9 months) | $ 90,277 | |
2,018 | 118,254 | |
2,019 | 35,794 | |
2020 and thereafter | 35,899 | |
Total amortization to be recognized | $ 280,224 | $ 308,353 |
Intangible Assets (Detail Textu
Intangible Assets (Detail Textuals) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2016 | Apr. 30, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Intangible Assets [Line Items] | |||||
Cash consideration | $ 76,045 | $ 10,000,000 | |||
Amortization expense of workforce acquired | 28,129 | $ 63,000 | |||
Mobile app development | |||||
Intangible Assets [Line Items] | |||||
Impairment loss recognized from intangible assets | $ 172,000 | ||||
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 | $ 93,828 | $ 187,653 | $ 93,825 | ||
Fair value of restricted shares granted | $ 121,695 | ||||
Restricted shares | 66,500 | ||||
Restriction period for restricted shares | 6 months | ||||
Fair value of intangible assets | $ 3,655 | ||||
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 | ||||
Intangible assets amortized period | 3 years |
Long-term Investments (Details)
Long-term Investments (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Cost method investment | $ 6,174,235 | $ 6,156,985 | |
Topsgame | |||
Debt Instrument [Line Items] | |||
Cost method investment | [1] | 3,174,235 | 3,156,985 |
Frequency | |||
Debt Instrument [Line Items] | |||
Cost method investment | [2] | $ 3,000,000 | $ 3,000,000 |
[1] | 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. | ||
[2] | Investment in Frequency 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 $3 million and accounts for the investment by the cost method. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of our cost method investments, accordingly the fair value of our cost method investments are not estimated. |
Long-term Investments (Details
Long-term Investments (Details 1) | 1 Months Ended | 3 Months Ended | |||
Oct. 31, 2016USD ($) | Oct. 31, 2016CNY (¥) | Mar. 31, 2017USD ($) | |||
Schedule Of Equity Method Investment [Roll Forward] | |||||
Beginning balance | $ 497,679 | ||||
Capital increase | |||||
Gain/(Loss) on investment | (43,746) | ||||
Impairment loss | (38,448) | ||||
Foreign currency translation adjustments | 45,763 | ||||
Ending balance | 461,248 | ||||
Wecast Internet | |||||
Schedule Of Equity Method Investment [Roll Forward] | |||||
Beginning balance | [1] | 132,782 | |||
Capital increase | $ 149,750 | ¥ 1,000,000 | [1] | ||
Gain/(Loss) on investment | [1] | (37,382) | |||
Impairment loss | [1] | ||||
Foreign currency translation adjustments | [1] | 3,804 | |||
Ending balance | [1] | 99,204 | |||
Hua Cheng | |||||
Schedule Of Equity Method Investment [Roll Forward] | |||||
Beginning balance | [2] | 364,897 | |||
Capital increase | [2] | ||||
Gain/(Loss) on investment | [2] | (6,364) | |||
Impairment loss | [2] | (38,448) | |||
Foreign currency translation adjustments | [2] | 41,959 | |||
Ending balance | [2] | 362,044 | |||
Shandong Media | |||||
Schedule Of Equity Method Investment [Roll Forward] | |||||
Beginning balance | [3] | ||||
Capital increase | [3] | ||||
Gain/(Loss) on investment | [3] | ||||
Impairment loss | [3] | ||||
Foreign currency translation adjustments | [3] | ||||
Ending balance | [3] | ||||
[1] | Investment in Wecast Internet In October 2016, the Company's subsidiary, YOU On Demand (Asia) Ltd., invested RMB 1,000,000 (approximately $149,750) in Wecast Internet Limited ("Wecast Internet") and held its 50% equity ownership. | ||||
[2] | Investment in Hua Cheng As of the years ended March 31, 2017 and December 31, 2016, the Company held 39% equity ownership in Hua Cheng, and accounted for the investment by the equity method. | ||||
[3] | Investment in Shandong Media As of the years ended March 31, 2017 and December 31, 2016, the Company held 30% equity ownership in Shandong Media, and accounts for the investment by the equity method. The investment was fully impaired as of March 31, 2017 and December 31, 2016. |
Long Term Investments (Detail T
Long Term Investments (Detail Textuals) | Sep. 14, 2016USD ($) | Sep. 14, 2016CNY (¥) | Jul. 03, 2016CNY (¥) | Oct. 31, 2016USD ($) | Oct. 31, 2016CNY (¥) | Apr. 30, 2016USD ($)$ / sharesshares | Mar. 28, 2016USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Apr. 15, 2016USD ($) | Apr. 13, 2016USD ($) | Apr. 13, 2016CNY (¥) | |||
Debt Instrument [Line Items] | ||||||||||||||||
Acquisition of game IP rights in cash paid | $ 6,174,235 | $ 6,156,985 | ||||||||||||||
Total purchase price | $ 10,000,000 | $ 9,277,574 | ||||||||||||||
Long term investments | 6,635,483 | 6,654,664 | [1] | |||||||||||||
Increase in investment | ||||||||||||||||
Impairment of equity method investments | 38,448 | |||||||||||||||
Shandong Media | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Increase in investment | [2] | |||||||||||||||
Impairment of equity method investments | [2] | |||||||||||||||
Hua Cheng | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Increase in investment | [3] | |||||||||||||||
Impairment of equity method investments | [3] | 38,448 | ||||||||||||||
Wecast Internet | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of equity ownership | 50.00% | 50.00% | ||||||||||||||
Increase in investment | $ 149,750 | ¥ 1,000,000 | [4] | |||||||||||||
Impairment of equity method investments | [4] | |||||||||||||||
Topsgame | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Acquisition of game IP rights in cash paid | [5] | 3,174,235 | 3,156,985 | |||||||||||||
Increase in investment | ¥ | ¥ 30,000,000 | |||||||||||||||
Topsgame | 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 | |||||||||||||
Sinotop Beijing | Shandong Media | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of equity ownership | 30.00% | |||||||||||||||
Sinotop Beijing | Hua Cheng | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of equity ownership | 39.00% | 39.00% | ||||||||||||||
Game IP Rights | SSS | SSF | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Acquisition of game IP rights in cash | $ 2,700,000 | ¥ 18,000,000 | ||||||||||||||
Game IP Rights | Topsgame | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Fair value of investment | $ 2,700,000 | |||||||||||||||
Capital Increase Agreement | Topsgame | 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 of Series A Preferred Stock | shares | 8,566,271 | |||||||||||||||
Percentage of equity ownership | 9.00% | |||||||||||||||
Total purchase price | $ 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 | |||||||||||||||
Cost of the investment in Frequency | $ 3,000,000 | |||||||||||||||
[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 4 "Acquisition") | |||||||||||||||
[2] | Investment in Shandong Media As of the years ended March 31, 2017 and December 31, 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 March 31, 2017 and December 31, 2016. | |||||||||||||||
[3] | Investment in Hua Cheng As of the years ended March 31, 2017 and December 31, 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. | |||||||||||||||
[5] | 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. | |||||||||||||||
[6] | Investment in Frequency 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 $3 million and accounts for the investment by the cost method. There were no identified events or changes in circumstances that may have had a significant adverse effect on the fair value of our cost method investments, accordingly the fair value of our cost method investments are not estimated. |
Stockholder's Equity (Detail Te
Stockholder's Equity (Detail Textuals) - USD ($) | Nov. 11, 2016 | Aug. 12, 2016 | Aug. 11, 2016 | Jul. 06, 2016 | Nov. 17, 2016 | Jul. 19, 2016 | Mar. 28, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Stockholders Equity [Line Items] | |||||||||
Exercise price of warrants | $ 2.20 | ||||||||
Aggregate purchase price | $ 10,000,000 | $ 9,277,574 | |||||||
Amended SSS Purchase Agreement | SSS | |||||||||
Stockholders Equity [Line Items] | |||||||||
Number of common stock share purchased | 4,545,455 | ||||||||
Shares issued, price per share (in dollars per share) | $ 2.20 | ||||||||
Exercise price of warrants | $ 2.75 | ||||||||
Aggregate purchase price | $ 10,000,000 | ||||||||
Acquire additional common stock | 1,818,182 | ||||||||
Seven Stars Works Co., Ltd | Common Stock Purchase Agreement | |||||||||
Stockholders Equity [Line Items] | |||||||||
Number of common stock share purchased | 2,272,727 | ||||||||
Shares issued, price per share (in dollars per share) | $ 1.76 | ||||||||
Aggregate purchase price | $ 4,000,000 | ||||||||
Proceeds from issuance of common stock | $ 4,000,000 | ||||||||
Number of shares issued | 2,272,727 | ||||||||
Harvest Alternative Investment Opportunities SPC | Common Stock Purchase Agreement | |||||||||
Stockholders Equity [Line Items] | |||||||||
Number of common stock share purchased | 2,272,727 | ||||||||
Shares issued, price per share (in dollars per share) | $ 1.76 | ||||||||
Aggregate purchase price | $ 4,000,000 | ||||||||
Proceeds from issuance of common stock | $ 4,000,000 | ||||||||
Number of shares issued | 2,272,727 | ||||||||
Sun Seven Stars Hong Kong Cultural Development Limited ("SSSHK") | Common Stock Purchase Agreement | |||||||||
Stockholders Equity [Line Items] | |||||||||
Number of common stock share purchased | 1,136,365 | ||||||||
Shares issued, price per share (in dollars per share) | $ 1.76 | ||||||||
Aggregate purchase price | $ 2,000,000 | ||||||||
Proceeds from issuance of common stock | $ 2,000,000 | ||||||||
Number of shares issued | 1,136,365 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Warrants | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Risk-free interest rate | 0.91% | 0.70% |
Expected volatility | 55.00% | 55.00% |
Expected term | 5 months 1 day | 8 months 1 day |
Expected dividend yield | 0.00% | 0.00% |
Fair value of warrant liabilities valuation method | Black Scholes | Monte Carlo |
Fair Value Measurements (Deta60
Fair Value Measurements (Details 1) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities (see Note 13) | $ 340,901 | $ 70,785 |
Warrants | Fair value on recurring basis | Level 1 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities (see Note 13) | ||
Warrants | Fair value on recurring basis | Level 2 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities (see Note 13) | ||
Warrants | Fair value on recurring basis | Level 3 | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities (see Note 13) | 340,901 | 70,785 |
Warrants | Fair value on recurring basis | Total Fair Value | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities (see Note 13) | $ 340,901 | $ 70,785 |
Fair Value Measurements (Deta61
Fair Value Measurements (Details 2) - Warrants - Fair value on recurring basis - Level 3 | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Warrant liabilities January 1, 2017 | $ 70,785 |
Settlements | |
Change in Fair Value | 270,116 |
Warrant liabilities March 31, 2017 | $ 340,901 |
Related Party Transactions (Det
Related Party Transactions (Detail Textuals) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Jan. 31, 2014 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | May 10, 2012 | ||
Related Party Transaction [Line Items] | ||||||
Loan from related parties | $ 2,173,891 | [1] | ||||
Principal amount of convertible note | 50,000,000 | |||||
Mr. Shane McMahon | $3.0 Million Convertible Note | ||||||
Related Party Transaction [Line Items] | ||||||
Loan from related parties | $ 3,000,000 | |||||
Principal amount of convertible note | $ 3,000,000 | |||||
Interest rate of convertible note | 4.00% | |||||
Amount recognized as beneficial conversion feature | $ 2,126,000 | |||||
Maturity date of the note | Dec. 31, 2015 | |||||
Interest expenses related to note | 30,000 | $ 30,000 | ||||
Interest payable | $ 497,425 | |||||
Mr. Shane McMahon | $3.0 Million Convertible Note | Series E Preferred Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Conversion price of note convertible into preferred stock shares | $ 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 4 "Acquisition") |
Related Party Transactions (D63
Related Party Transactions (Detail Textuals 1) | Mar. 31, 2017USD ($) |
BJSS | |
Related Party Transaction [Line Items] | |
Accounts receivable due | $ 3,800,000 |
ZHV | Shanghai Wecast Marketing Projection Ltd | |
Related Party Transaction [Line Items] | |
Intercompany lending balances | 165,234 |
Global AAC Ltd | YOD Hong Kong | |
Related Party Transaction [Line Items] | |
Intercompany lending balances | 270,000 |
Sun News G HK Ltd | YOD Hong Kong | |
Related Party Transaction [Line Items] | |
Intercompany lending balances | 180,000 |
SHWAP | ZHV | |
Related Party Transaction [Line Items] | |
Intercompany lending balances | 1,159,537.92 |
SHWAP | Shanghai Blue World Investment Management Consulting Limited ("SVG WFOE") | |
Related Party Transaction [Line Items] | |
Intercompany lending balances | 220,312 |
Wide Angle China Operation Holdings Limited | M.Y. Products LLC | |
Related Party Transaction [Line Items] | |
Intercompany lending balances | 155,500 |
Sun Seven Stars Hong Kong Cultural Development Limited ("SSSHK") | M.Y. Products LLC | |
Related Party Transaction [Line Items] | |
Intercompany lending balances | $ 1,370,000 |
Related Party Transactions (D64
Related Party Transactions (Detail Textuals 2) ¥ in Millions | 1 Months Ended | 3 Months Ended | |||||
Sep. 19, 2016USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Apr. 13, 2016USD ($) | Apr. 13, 2016CNY (¥) | ||
Related Party Transaction [Line Items] | |||||||
Total accrued license content fees due to Hua Cheng | $ 1,189,453 | $ 1,236,661 | [1] | ||||
Amount due to related parties | 2,173,891 | [1] | |||||
Sun Video Group HK Limited | M.Y. Products LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of ownership of shares to be purchase | 51.00% | ||||||
Worth of common stock to exchange | $ 50,000,000 | ||||||
Cash consideration for exchange | 800,000 | ||||||
Good faith deposit amount | 800,000 | ||||||
Payment of deposit to acquiree | $ 650,000 | ||||||
Hua Cheng | |||||||
Related Party Transaction [Line Items] | |||||||
Licensed content fees | $ 56,000 | ||||||
Total accrued license content fees due to Hua Cheng | $ 54,000 | ||||||
SSF | SSS | Game Right Assignment Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Acquisition of game IP rights in cash | $ 2,700,000 | ¥ 18 | |||||
[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 4 "Acquisition") |
SSS Agreements (Detail Textuals
SSS Agreements (Detail Textuals) - USD ($) | Nov. 11, 2016 | Jul. 06, 2016 | Mar. 28, 2016 | Mar. 31, 2017 | Mar. 31, 2016 |
Agreement [Line Items] | |||||
Aggregate purchase price | $ 10,000,000 | $ 9,277,574 | |||
Exercise price of warrants | $ 2.20 | ||||
Recorded additional paid-in capital for warrants | $ 722,426 | ||||
Common Stock Purchase Agreement | Seven Stars Works Co., Ltd | |||||
Agreement [Line Items] | |||||
Number of common stock share purchased | 2,272,727 | ||||
Purchase price per share (in dollars per share) | $ 1.76 | ||||
Aggregate purchase price | $ 4,000,000 | ||||
Common Stock Purchase Agreement | Sun Seven Stars Hong Kong Cultural Development Limited ("SSSHK") | |||||
Agreement [Line Items] | |||||
Number of common stock share purchased | 1,136,365 | ||||
Purchase price per share (in dollars per share) | $ 1.76 | ||||
Aggregate purchase price | $ 2,000,000 | ||||
Common Stock | |||||
Agreement [Line Items] | |||||
Number of common stock share purchased | 29,585 | 4,545,455 | |||
Aggregate purchase price | $ 30 | $ 4,545 | |||
Amended SSS Purchase Agreement | SSS | |||||
Agreement [Line Items] | |||||
Number of common stock share purchased | 4,545,455 | ||||
Purchase price per share (in dollars per share) | $ 2.20 | ||||
Interest rate of convertible note | 0.56% | ||||
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 Textua66
SSS Agreements (Detail Textuals 1) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jun. 27, 2016 | Mar. 28, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Agreement [Line Items] | ||||
Amortized SSS Notes | $ 472,450 | |||
Revised Content Agreement | SSS | Convertible promissory note | ||||
Agreement [Line Items] | ||||
Principal amount of SSS notes | $ 17,718,000 | |||
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 | |||
Unamortized issuance costs | $ 8,000 | |||
Accrued interest expense | $ 25,000 | |||
Fair value of common stock per stock | $ 1.81 |
SSS Agreements (Detail Textua67
SSS Agreements (Detail Textuals 2) - USD ($) | Nov. 10, 2016 | Apr. 05, 2016 | Jun. 28, 2016 | Dec. 31, 2015 | Dec. 21, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Agreement [Line Items] | |||||||||
Net income | $ 2,212,879 | $ (2,136,471) | |||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | [1] | ||||||
Earn-out share award expense | $ 13,700,000 | ||||||||
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 income | 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 income | 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 income | $ 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 4 "Acquisition") |
Warrant Liabilities (Detail Tex
Warrant Liabilities (Detail Textuals) - USD ($) | 3 Months Ended | |||
Mar. 31, 2017 | Dec. 31, 2016 | Aug. 30, 2012 | ||
Warrant Liabilities [Abstract] | ||||
Number of shares called by warrants | 977,063 | |||
Warrant liabilities | $ 340,901 | $ 70,785 | [1] | $ 1,525,000 |
Warrant liability recorded at fair value | 340,901 | $ 70,785 | ||
Gain on revaluation of warrants | $ 270,116 | |||
[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 4 "Acquisition") |
Share-Based Payments (Details)
Share-Based Payments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | ||
Employees and directors share-based payments | $ 71,428 | $ 139,000 |
Share-Based Payments (Details 1
Share-Based Payments (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Options Outstanding | ||
Outstanding at January 1, 2017 | 2,101,428 | |
Granted | 150,000 | |
Exercised | ||
Expired | ||
Forfeited | ||
Outstanding at March 31, 2017 | 2,251,428 | |
Vested and expected to vest as of March 31, 2017 | 2,251,428 | |
Options exercisable at March 31, 2017(vested) | 1,687,051 | |
Weighted Average Exercise Price | ||
Outstanding at January 1, 2017 | $ 2.42 | |
Granted | 1.62 | |
Outstanding at March 31, 2017 | 2.33 | |
Vested and expected to vest as of March 31, 2017 | 2.33 | |
Options exercisable at March 31, 2017 (vested) | $ 2.80 | |
Weighted Average Remaining Contractual Life (Years) | ||
Outstanding at March 31, 2017 | 4 years 8 months 1 day | 4 years 8 months 1 day |
Vested and expected to vest as of March 31, 2017 | 4 years 9 months 18 days | |
Options exercisable at March 31, 2017 (vested) | 3 years 4 months 17 days | |
Aggregated Intrinsic Value | ||
Outstanding at March 31, 2017 | ||
Vested and expected to vest as of March 31, 2017 | ||
Options exercisable at March 31, 2017 (vested) |
Share-Based Payments (Details 2
Share-Based Payments (Details 2) | Jan. 04, 2017 |
Compensation and Retirement Disclosure [Abstract] | |
Method used | Black Scholes |
Risk-free interest rate, minimum | 2.26% |
Risk-free interest rate, maximum | 2.34% |
Expected volatility | 55.00% |
Expected term | 5 years 10 months 17 days |
Expected dividend yield | 0.00% |
Share-Based Payments (Details 3
Share-Based Payments (Details 3) - $ / shares | 3 Months Ended | ||
Mar. 31, 2017 | Dec. 31, 2016 | ||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 3,778,002 | 3,783,002 | |
Exercise price of warrants | $ 2.20 | ||
2012 August Financing Warrants | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | [1] | 536,250 | 536,250 |
Exercise price of warrants | [1] | $ 1.50 | |
Expiration Date | [1] | 08/30/17 | |
2013 Broker Warrants (Series D Financing) | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 223,571 | 228,571 | |
Exercise price of warrants | $ 1.75 | ||
Expiration Date | 07/05/18 | ||
2013 Broker Warrants (Convertible Note) | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 114,285 | 114,285 | |
Exercise price of warrants | $ 1.75 | ||
Expiration Date | 11/04/18 | ||
2014 Broker Warrants (Series E Financing) | |||
Class of Warrant or Right [Line Items] | |||
Number of Warrants Outstanding and Exercisable | 1,085,714 | 1,085,714 | |
Exercise price of warrants | $ 1.75 | ||
Expiration Date | 01/31/19 | ||
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 | 03/28/18 | ||
[1] | The warrants are classified as derivative liabilities as disclosed in Note 12. |
Share-Based Payments (Detail Te
Share-Based Payments (Detail Textuals) - USD ($) | Mar. 16, 2017 | Jan. 04, 2017 | Mar. 01, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 03, 2010 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options outstanding to purchase shares of common stock | 2,251,428 | 2,101,428 | |||||
Warrants outstanding to purchase shares of common stock | 3,778,002 | 3,783,002 | |||||
Unrecognized compensation expense related to non-vested share options | $ 501,000 | ||||||
Weighted average period for recognition related to non-vested share options | 2 years 1 month 24 days | ||||||
Total fair value of vested shares | $ 16,000 | ||||||
Weighted average exercise price of warrants | $ 2.20 | ||||||
Stock options issued to employees | 150,000 | ||||||
SSS | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants outstanding to purchase shares of common stock | 1,818,182 | ||||||
Employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock options issued to employees | 35,000 | 70,000 | 45,000 | ||||
Stock options grant date fair value | $ 36,750 | $ 47,415 | $ 45,443 | ||||
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 | 1,069,465 | ||||||
Weighted average remaining life of warrants | 1 year 2 months 9 days |
Earnings (Loss) Per Common Sh74
Earnings (Loss) Per Common Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Net earnings/(loss) attributable to common stockholders, Basic | $ 2,212,879 | $ (2,136,471) |
Net earnings/(loss) attributable to common stockholders, Diluted | $ 2,212,879 | $ (2,136,471) |
Average equivalent shares | ||
Weighted-average common shares outstanding, Basic | 55,382,002 | 24,484,562 |
Weighted-average common shares outstanding, Diluted | 60,715,721 | 24,484,562 |
Convertible preferred shares | 2,150,237 | |
Dilutive effect of convertible promissory notes | 3,183,482 | |
Total average equivalent shares, Basic | 55,382,002 | 24,484,562 |
Total average equivalent shares, Diluted | 60,715,721 | 24,484,562 |
Per-share amounts | ||
Earnings/(loss) per common share, Basic | $ 0.04 | $ (0.09) |
Earnings/(loss) per common share, Diluted | $ 0.04 | $ (0.09) |
Earnings (Loss) Per Common Sh75
Earnings (Loss) Per Common Share (Details 1) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 6,029,430 | 25,110,616 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 3,778,002 | 4,009,669 |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 2,251,428 | 1,722,325 |
Series A Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 933,333 | |
Series E Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 7,254,997 | |
Convertible promissory note and interest | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 11,190,292 |
Income Taxes (Detail Textuals)
Income Taxes (Detail Textuals) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Deferred tax assets valuation allowance, percentage | 100.00% |
Valuation allowance increased | $ 400,000 |
Unrecorded tax benefits | 0 |
U.S domestic | |
Operating Loss Carryforwards [Line Items] | |
Cumulative tax loss carryforwards | 28,900,000 |
Foreign | |
Operating Loss Carryforwards [Line Items] | |
Cumulative tax loss carryforwards | $ 17,500,000 |
Contingencies and Commitments77
Contingencies and Commitments (Details) | Mar. 31, 2017USD ($) |
Years ending December 31, | |
2017(9 months) | $ 235,000 |
2,018 | 266,000 |
2,019 | 193,000 |
2,020 | 199,000 |
Thereafter | 84,000 |
Total | $ 977,000 |
Contingencies and Commitments78
Contingencies and Commitments (Details 1) - Licensed Content Commitment | Mar. 31, 2017USD ($) |
Years ending December 31, | |
2017 (9 months) | $ 1,454,000 |
2,018 | 217,000 |
2,019 | 217,000 |
Total | $ 1,888,000 |
Contingencies and Commitments79
Contingencies and Commitments (Details 2) - Property Commitment | Mar. 31, 2017USD ($) |
Years ending December 31, | |
2017 (9 months) | $ 992,000 |
Total | $ 992,000 |
Contingencies and Commitments80
Contingencies and Commitments (Details 3) - Marketing Expense Commitment | Mar. 31, 2017USD ($) |
Years ending December 31, | |
2017 (9 months) | $ 106,000 |
Total | $ 106,000 |
Contingencies and Commitments81
Contingencies and Commitments (Detail Textuals) - Beijing Kuntin Taiming Investment Management Co., Ltd - Building ¥ in Millions | 3 Months Ended | |
Mar. 31, 2017USD ($)Acquisition | Mar. 31, 2017CNY (¥)Acquisition | |
Loss Contingencies [Line Items] | ||
Total consideration for the property acquisition | $ 4,239,000 | ¥ 27.4 |
Payments to acquire buildings | $ 3,247,000 | ¥ 20.5 |
Number of acquisitions | 2 | 2 |
Concentration, Credit and Oth82
Concentration, Credit and Other Risks (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
RMB | PRC | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | $ 474,523 | $ 1,566,107 |
RMB | Hong Kong Special Administrative Region (HK SAR) | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | 38,635 | 14,163 |
US | PRC | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | 177,570 | 670,951 |
US | Hong Kong Special Administrative Region (HK SAR) | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | 296,197 | 1,403,000 |
US | Cayman Islands (Cayman) | ||
Revenue, Major Customer [Line Items] | ||
Bank deposits with financial institutions | $ 58,637 | $ 95,030 |
Concentration, Credit and Oth83
Concentration, Credit and Other Risks (Detail Textuals) | Oct. 08, 2016CNY (¥) | Dec. 30, 2016CNY (¥) | Mar. 31, 2017Customer | Mar. 31, 2016Customer | Jan. 31, 2017 |
Wide Angle Group Limited | BT Capital Global Limited | |||||
Revenue, Major Customer [Line Items] | |||||
Percentage of ownership of shares to be purchase | 55.00% | ||||
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 | ||||
First installments of agreement | ¥ 6,500,000 | ||||
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 | ||||
Major Customers | Revenue | |||||
Revenue, Major Customer [Line Items] | |||||
Description of percentage of revenue for major customer | more than 10% | more than 10% | |||
Number of customers | Customer | 1 | 2 | |||
Major Customers | 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 Oth84
Concentration, Credit and Other Risks (Detail Textuals 1) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)Supplier | Mar. 31, 2016Supplier | Dec. 31, 2016USD ($) | |
Revenue, Major Customer [Line Items] | |||
Insured deposit | $ | $ 371,824 | $ 384,515 | |
Licensed Content Commitment | |||
Revenue, Major Customer [Line Items] | |||
Cost of Goods Sold | $ | $ 17,700,000 | ||
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 | Supplier | 2 | 4 | |
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 | Supplier | 1 | 2 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Detail Textuals) - USD ($) | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2011 | Mar. 31, 2017 | Mar. 31, 2016 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |||
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 | $ 1,233 | $ 1,000 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
NET SALES TO EXTERNAL CUSTOMERS | ||
Net sales | $ 33,164,351 | $ 1,269,726 |
GROSS PROFIT | ||
Gross profit | 3,821,972 | 353,946 |
Legacy YOD | ||
NET SALES TO EXTERNAL CUSTOMERS | ||
Net sales | 787,328 | 1,269,726 |
GROSS PROFIT | ||
Gross profit | 27,493 | $ 353,946 |
Wecast Service | ||
NET SALES TO EXTERNAL CUSTOMERS | ||
Net sales | 32,377,023 | |
GROSS PROFIT | ||
Gross profit | $ 3,794,479 |
Segment Reporting (Details 1)
Segment Reporting (Details 1) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | |
TOTAL ASSETS | |||
Total | $ 73,649,049 | $ 55,746,290 | [1] |
Unallocated assets | |||
TOTAL ASSETS | |||
Total | 4,181,904 | 4,321,677 | |
Intersegment elimination | |||
TOTAL ASSETS | |||
Total | (203,033) | ||
Legacy YOD | |||
TOTAL ASSETS | |||
Total | 35,955,219 | 36,975,911 | |
Wecast Service | |||
TOTAL ASSETS | |||
Total | $ 33,714,959 | $ 14,448,702 | |
[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 4 "Acquisition") |