Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Apr. 15, 2015 | Jun. 30, 2014 | |
Document and Entity Information: | |||
Entity Registrant Name | Eagle Mountain Corp | ||
Entity Trading Symbol | EMTC | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | TRUE | ||
Entity Central Index Key | 934445 | ||
Current Fiscal Year End Date | -19 | ||
Entity Common Stock, Shares Outstanding | 39,684,495 | ||
Entity Public Float | $127,907 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Description | Amendment No 1 |
CONSOLIDATED_BALANCE_SHEETS_St
CONSOLIDATED BALANCE SHEETS (Stated in US Dollars) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash and cash equivalents | $0 | $231,119 |
Restricted cash | 0 | 0 |
Accounts receivable, net of allowance for doubtful accounts of $0 for 2014 and $555,993 for 2013 | 1,358,873 | |
Inventories, net | 1,081,511 | |
Other current assets | 128 | 91,618 |
Total current assets | 128 | 2,763,121 |
Long-term assets: | ||
Property, plant and equipment, net | 8,212,849 | |
Other deposits | 138,234 | |
Amounts due from Aristo / Mr. Yang | 931,652 | |
TOTAL ASSETS | 128 | 12,045,856 |
Current liabilities: | ||
Accounts payable | 623,069 | |
Accruals | 335,522 | 554,231 |
Lines of credit and loan facilities | 3,178,580 | |
Bank loans | 3,222,113 | |
Current portion of loan from a third party | 641,026 | |
Current portion of capital lease | 75,917 | |
Income tax payable | -177,291 | |
Due to shareholders for converted pledged collateral | 112,533 | 112,385 |
Other current liabilities | 12,444,000 | |
Total current liabilities | 448,055 | 20,674,030 |
Long-term liabilities: | ||
Loan from a third party, less current portion | 6,410,256 | |
Capital lease, less current portion | 57,511 | |
Deferred tax liabilities | 5,569 | |
Total long-term liabilities | 6,473,336 | |
TOTAL LIABILITIES | 448,055 | 27,147,366 |
NET ASSETS (LIABILITIES) | -447,927 | -15,101,510 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, 20,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2014 and 2013 | 0 | 0 |
Common stock, $0.001 par value; 50,000,000 shares authorized; 39,684,495 and 39,684,495 shares issued and outstanding as of December 31, 2014 and 2013 | 39,685 | 39,685 |
Additional paid in capital | 4,333,723 | 4,333,723 |
Exchange reserve | -1,776 | -1,810 |
Retained earnings (deficits) | -4,819,559 | -16,879,337 |
Stockholder's equity attributable to parent Total | -447,927 | -12,507,739 |
Non-controlling interest | -2,593,771 | |
TOTAL STOCKHOLDERS' EQUITY | ($447,927) | ($15,101,510) |
BALANCE_SHEETS_PARENTHETICALS
BALANCE SHEETS PARENTHETICALS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Parentheticals | ||
Preferred Stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 50,000,000 | 50,000,000 |
Common Stock, shares issued | 39,684,495 | 39,684,495 |
Common Stock, shares outstanding | 39,684,495 | 39,684,495 |
Accounts receivable, net of allowance for doubtful accounts | $0 | $555,993 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Stated in US Dollars) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Net sales | ||
Net sales | $1,013,241 | $72,175,289 |
Costs of sales | -1,113,533 | -71,949,939 |
Gross profit (loss) | -100,292 | 225,350 |
Operating expenses | ||
Sales and marketing expenses | 118,365 | 154,014 |
General and administrative expenses | 447,850 | 4,906,299 |
Income (loss) from operations | -666,507 | -4,834,963 |
Other expenses (income) | ||
Rental income | -167,134 | |
Interest expenses | 1,041,095 | |
Management and service income | -44,362 | -331,816 |
Interest income | -7 | -2,000 |
(Profit) on disposals of fixed assets | -1,930,234 | |
Loss (Profit) on disposals of assets | -12,673,201 | 68,333 |
Exchange differences | -4,533 | -28,729 |
Reverse for provision of doubtful account | 0 | 0 |
Miscellaneous | -4,182 | -173,079 |
Impairment of goodwill | 11,341,123 | |
Share result of a jointly-controlled entity | -883,199 | |
Income (loss) before income taxes | 12,059,778 | -13,769,323 |
Income tax (reversal) provision | 21,887 | |
Net income (loss) | 12,059,778 | -13,791,210 |
Attributable to : | ||
Non-controlling interest | -451,124 | |
Shareholders of the Company | 12,059,778 | -13,340,086 |
Net income (loss) inculding portion attributable to Non controlling interest Total | $12,059,778 | ($13,791,210) |
Earnings (loss) per share - basic and diluted | $0.30 | ($0.34) |
Weighted average number of shares - basic and diluted | 39,684,495 | 39,562,522 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME (Stated in US Dollars) (USD $) | Number of shares | Amount | Additional paid-in capital | Reserve | Retained earnings (accumulated losses) | Total |
Balance at Jan. 01, 2013 | 39,474,495 | 39,475 | 4,321,333 | 2,072 | -3,539,251 | 823,629 |
Issue of capital | $210,000 | $210 | $12,390 | $12,600 | ||
Exchange reserve | -3,882 | -3,882 | ||||
Net income (loss) | -13,340,086 | -13,340,086 | ||||
Balance at Dec. 31, 2013 | 39,684,495 | 39,685 | 4,333,723 | -1,810 | -16,879,337 | -12,507,739 |
Balance at Jan. 01, 2014 | 39,684,495 | 39,685 | 4,333,723 | -1,810 | -16,879,337 | -12,507,739 |
Issue of capital | 0 | 0 | 0 | 0 | 0 | |
Exchange reserve | 34 | 34 | ||||
Net income (loss) | $12,059,778 | $12,059,778 | ||||
Balance at Dec. 31, 2014 | 39,684,495 | 39,685 | 4,333,723 | -1,776 | -4,819,559 | -447,927 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Stated in US Dollars) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows provided by (used for) operating activities : | ||
Net (loss) income | $12,059,778 | ($13,340,086) |
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||
Allowance for doubtful accounts | 457,932 | |
Depreciation and amortization | 756,596 | |
Change in inventory reserve | 662,093 | |
Issuance of common stocks to consultant as: | ||
Professional fee for consultant services | 12,600 | |
Gain on disposal of fixed assets | -1,930,234 | |
Loss on disposal of investments | 68,333 | |
Loss (gain) on investment in a jointly-controlled entity | -883,199 | |
Loss share by non-controlled party | -451,124 | |
Amortization of goodwill reserve | 11,341,123 | |
Exchange reserve | -3,882 | |
(Increase) decrease in assets | ||
Accounts receivable - other | 1,358,873 | -589,104 |
Inventories | 1,081,511 | 2,872,546 |
Other current assets | 91,490 | 685,251 |
Other assets | 138,234 | 27,091 |
Increase (decrease) in liabilities | ||
Accounts payable - other | -623,069 | 265,063 |
Account payable - related parties | -9,209,313 | |
Accrued expenses | -218,709 | 178,718 |
Income tax payable | 171,722 | |
Deferred tax | -68,720 | |
Other current liabilities | -12,444,000 | 57,999 |
Total adjustments | -10,443,948 | 4,249,769 |
Net cash provided by (used for) operating activities | 1,615,830 | -9,090,317 |
Cash flows used for investing activities: | ||
Advanced from Aristo / Mr. Yang | 148 | 3,961,166 |
Advanced to Aristo / Mr. Yang | 931,652 | -1,234.46 |
(Increase) decrease in restricted cash | 838,413 | |
Cash proceeds from sales of fixed assets | 2,587,949 | |
Cash proceeds from sales of investments | 3,633,173 | |
Purchase of fixed assets | -41,105 | |
Decrease in minority interest | 2,593,805 | |
Decrease of fixed assets | 8,212,849 | |
Net cash provided by (used for) investing activities | 11,738,454 | 9,745,137 |
Cash flows provided by (used for) financing activities: | ||
Net repayments on lines of credit and notes payable | -10,229,862 | -5,140,742 |
Principal payments to bank | -3,222,113 | -6,018,222 |
Borrowings from bank | 3,141,026 | |
Borrowings from non-controlled party | 7,051,282 | |
Principal payments under capital lease obligation | -133,428 | -96,507 |
Net cash provided by (used for) financing activities | -13,585,403 | -1,063,163 |
Net increase (decrease) in cash and cash equivalents | -231,119 | -408,343 |
Cash and cash equivalents - beginning of year | 231,119 | 639,462 |
Cash and cash equivalents - end of year | 231,119 | |
Supplementary disclosure of cash flow information: | ||
Interest paid | 0 | 1,041,095 |
Income tax paid (reversal) | $0 | $0 |
ORGANIZATION_AND_PRINCIPAL_ACT
ORGANIZATION AND PRINCIPAL ACTIVITY | 12 Months Ended | |
Dec. 31, 2014 | ||
ORGANIZATION AND PRINCIPAL ACTIVITY: | ||
ORGANIZATION AND PRINCIPAL ACTIVITY | NOTE 1. | Organization and principal activitY |
Organization and Basis of Presentation | ||
USmart Mobile Device Inc. (“USmart”) and its subsidiaries are referred to herein collectively and on a consolidated basis as the “Company” or “we”, “us” or “our” or similar terminology. | ||
The Company was incorporated under the laws of the State of Delaware on September 17, 2002 and previously known as ACL Semiconductors Inc. The Company acquired Atlantic Components Limited, a Hong Kong incorporated company (“Atlantic”) through a reverse-acquisition that was effective September 30, 2003. On September 28, 2012, the Company acquired Jussey Investments Limited, a company incorporated in British Virgin Islands (“Jussey”). The subsidiaries were held for disposal since March 31, 2014 and officially disposed on September 30, 2014, the Company disposed all of the equity interest held in ACL International Holdings Limited (“ACL Holdings”). | ||
After the disposal, the Company is still engaged in the sales and distribution of smartphones, electronic products and components in Hong Kong Special Administrative Region (“Hong Kong”) and the People’s Republic of China (“China” or the “PRC”). | ||
Business Activity | ||
USmart was incorporated under the laws of the State of Delaware on September 17, 2002. The Company has been primarily engaged in the business of distribution of memory products mainly under “Samsung” brand name which principally comprised Dynamic Random Access Memory (“DRAM”), Graphic Random Access Memory (“Graphic RAM”), and Flash memory components for the Hong Kong Special Administrative Region (“Hong Kong”) and People’s Republic of China (the “PRC” or “China”) markets formerly through its indirectly wholly owned subsidiary Atlantic Components Limited (“Atlantic”), a Hong Kong incorporated company, and ATMD (Hong Kong) Limited (“ATMD”) after April 1, 2012. The Company, through its wholly owned subsidiary ACL International Holdings Limited (“ACL Holdings”), owns 30% equity interest in ATMD, the joint venture with Tomen Devices Corporation (“Tomen”). ATMD offers a broad range of industry-leading Samsung semiconductor products, and additional components from SAMCO (such as wifi and camera modules) and SMD (smartphone panels). Atlantic integrated around 90% of its business relating to procurement of semiconductors and electronic parts from Samsung to ATMD. Subsequent to the start of the operations of ATMD, the Company’s sales, the cost of sales and operating expenses are expected to evolve in accordance with the transition of the Company’s business as described above. Through the acquisition of Jussey Investments Limited (“Jussey”) on September 28, 2012, the Company has diversified its product portfolio and customer network, obtained design and manufacturing capabilities, and tapped into the blooming telecommunication industry with access to the 3G baseband licenses. On September 30, 2014, the Company disposed all of the equity interest held in ACL International Holdings Limited (“ACL Holdings”) to an independent third party Targa Electronics Company Limited (“Targa”). On completion of the disposal, USmart no longer holds any equity interest in ACL Holdings, and the Company will maintain sales and distribution operation of smartphones, electronic products and components in a moderate size and will also seek for acquisition of other business opportunity. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. | Summary of significant accounting policies | |||||||||
(a) | Method of Accounting | ||||||||||
The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The consolidated financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of consolidated financial statements. | |||||||||||
(b) | Principles of consolidation | ||||||||||
The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiary. All significant inter-company balances and transactions are eliminated in consolidation. | |||||||||||
The Company owned its subsidiary soon after its inception and continued to own the equity’s interests through December 31, 2014. The following table depicts the identity of the subsidiary: | |||||||||||
Name of Subsidiary | Place ofIncorporation | Attributable EquityInterest % | Registered Capital | ||||||||
ACL International Holdings Limited | Hong Kong | 0 | $ | 0.13 | |||||||
Atlantic Components Limited (1) | Hong Kong | 0 | $ | 384,615 | |||||||
Aristo Technologies Limited (2) | Hong Kong | 0 | $ | 1,282 | |||||||
Dongguan Kezheng Electronics Limited (3) | PRC | 0 | $ | 680,499 | |||||||
eVision Telecom Limited (4) | Hong Kong | 0 | $ | 25,641 | |||||||
Jussey Investments Limited (1) | BVI | 0 | $ | 1 | |||||||
USmart Electronic Products Limited (4) | Hong Kong | 0 | $ | 1.28 | |||||||
Note: (1) Wholly owned subsidiary of ACL International Holdings Limited | |||||||||||
(2) Deemed variable interest entity | |||||||||||
(3) Wholly owned subsidiary of USmart Electronic Products Limited | |||||||||||
(4) Wholly or partially owned by Jussey Investments Limited | |||||||||||
Variable Interests Entities | |||||||||||
According to ASC 810-10-25 which codified FASB Interpretation No. 46 (Revised December 2003), Consolidation of Variable Interest Entities — an interpretation of ARB No. 51 (FIN 46R), an entity that has one or more of the three characteristics set forth therein is considered a variable interest entity. One of such characteristics is that the equity investment at risk in the relevant entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by any parties, including the equity holders. | |||||||||||
ASC 810-05-08A specifies the two characteristics of a controlling financial interest in a variable interest entity (“VIE”): (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance; and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company is the primary beneficiary of Aristo because the Company can direct the activities of Aristo through the common director and major shareholder. Also, the Company extended substantial accounts receivable to Aristo and created an obligation to absorb loss if Aristo failed. Moreover, ASC 810-25-42 & 43 provides guidance on related parties treatment of VIE and specifies the relationship of de-facto agent and principal. This guidance will help to determine whether the Company will consolidate Aristo. | |||||||||||
All the above mentioned subsidiaries or deem subsidiary were no longer belonged to the Group and were not our subsidiaries and deem subsidiaries after September 30, 2014. | |||||||||||
Aristo Technologies Limited | |||||||||||
The Company sells Samsung memory chips to Aristo and allows long grace periods for Aristo to repay the open accounts receivable. Being the biggest creditor, the Company does not require Aristo to pledge assets or enter into any agreements to bind Aristo to specific repayment terms. The Company does not experience any bad debt from Aristo. Hence, the Company does not provide any bad debt provision derived from Aristo. Although, the Company is not involved in Aristo’s daily operation, it believes that there will not be significant additional risk derived from the trading relationship and transactions with Aristo. | |||||||||||
Aristo is engaged in the marketing, selling and servicing of computer products and accessories including semiconductors, LCD products, mass storage devices, consumer electronics, computer peripherals and electronic components for different generations of computer related products. Aristo carries various brands of products such as Samsung, Hynix, Micron, Elpida, Qimonda, Lexar, Dane-Elec, Elixir, SanDisk and Winbond. Aristo 2013 sales were around 7 million; it was only a small distributor that accommodated special requirements for specific customers. | |||||||||||
Aristo supplies different generations of computer related products. Old generation products will move slowly owing to lower market demand. According to the management experience and estimation on the actual market situation, old products carrying on hand for ten years will have no resell value. Therefore, inventories on hand over ten years will be written-off by Aristo immediately. | |||||||||||
The Company sold to Aristo in order to fulfill Aristo’s periodic need for Samsung memory products based on prevailing market prices, which Aristo, in turn, sells to its customers. The sales to Aristo for fiscal year 2014 were $Nil. For fiscal year 2013 were $3,337,735 with account receivable of $4,850,769 as of December 31, 2013. For fiscal year 2012 were $106,031 with account receivable of $5,323,933 as of December 31, 2012. For fiscal year 2011 were $7,086,379 with accounts receivable of $16,871,739 as of December 31, 2011. For fiscal year 2010 were $7,123,769 with accounts receivable of $14,073,937 as of December 31, 2010. | |||||||||||
The Company purchases from Aristo, from time to time, LCD panels, Samsung memory chips, DRAM, Flash memory, central processing units, external hard disks, DVD readers and writers that the Company cannot obtain from Samsung directly due to supply limitations. | |||||||||||
Acquisition | |||||||||||
The Company uses the acquisition method of accounting for business combinations which requires that the assets acquired and liabilities assumed be recorded at the date of the acquisition at their respective fair values. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. If the fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined at the date of acquisition, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of acquired business are reflected in the acquirer’s consolidated financial statements and results of operations after the date of the acquisition. | |||||||||||
(c) | Jointly-controlled entity | ||||||||||
A jointly-controlled entity is a corporate joint venture that is subject to joint control, resulting in none of the participating parties having unilateral control over the economic activity of the jointly-controlled entity. | |||||||||||
The Group’s investment in a jointly-controlled entity is stated in equity method for the consolidated statement of financial position the Group’s shares of the equity of a jointly-controlled entity and the consolidated income statement and consolidated reserves, respectively. | |||||||||||
(d) | Use of estimates | ||||||||||
The preparation of consolidated financial statements that conform with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time, however, actual results could differ materially from those estimates. | |||||||||||
(e) | Economic and political risks | ||||||||||
The Company’s operations are conducted in Hong Kong and China. A large number of customers are located in Southern China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in Hong Kong and China, and by the general state of the economy in Hong Kong and China. | |||||||||||
The Company’s operations and customers in Hong Kong and Southern China are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments, and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in Hong Kong and China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. | |||||||||||
(f) | Property, plant and equipment | ||||||||||
Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. | |||||||||||
Estimated useful lives of the plant and equipment are as follows: | |||||||||||
Automobiles | 3 1/3 years | ||||||||||
Computers | 5 years | ||||||||||
Leasehold improvement | 5 years | ||||||||||
Land and buildings | By estimated useful life | ||||||||||
Office equipment | 5 years | ||||||||||
Machinery | 10 years | ||||||||||
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. | |||||||||||
(g) | Account receivable | ||||||||||
Accounts receivable is carried at the net invoiced value charged to customer. The Company records an allowance for doubtful accounts to cover estimated credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. The Company evaluates the credit risk of its customers utilizing historical data and estimates of future performance. | |||||||||||
(h) | Accounting for the impairment of long-lived assets | ||||||||||
The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC No. 360 (formerly Statement of Financial Accounting Standards No. 144). The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose. | |||||||||||
During the reporting years, there was no impairment loss. | |||||||||||
(i) | Cash and cash equivalents | ||||||||||
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts in Hong Kong. The Company does not maintain any bank accounts in the United States of America. | |||||||||||
(j) | Inventories | ||||||||||
Inventories are stated at the lower of cost or market and are comprised of purchased computer technology resale products. Cost is determined using the first-in, first-out method. | |||||||||||
(k) | Lease assets | ||||||||||
Leases that substantially transfer all the benefits and risks of ownership of assets to the company are accounted for as capital leases. At the inception of a capital lease, the asset is recorded together with its long term obligation (excluding interest element) to reflect the purchase and the financing. | |||||||||||
Leases which do not transfer substantially all the risks and rewards of ownership to the company are classified as operating leases. Payments made under operating leases are charged to income statement in equal installments over the accounting periods covered by the lease term. Lease incentives received are recognized in income statement as an integral part of the aggregate net lease payments made. Contingent rentals are charged to income statement in the accounting period which they are incurred. | |||||||||||
(l) Income taxes | |||||||||||
We are governed by the Internal Revenue Code of the United States, the Hong Kong Inland Revenue Department and the PRC’s Income Tax Laws. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income of the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Realization of the deferred tax asset is dependent on generating sufficient taxable income in future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||||||||
The Company did not have any interest or penalty recognized in the income statements for the period ended December 31, 2014 and December 31, 2013 or the balance sheet, as of December 31, 2014 and December 31, 2013. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months. The Company’s 2011, 2012, 2013 and 2014 U.S. federal income tax returns are subject to U.S. Internal Revenue Service examination and the Company’s 2007/8, 2008/9, 2009/2010, 2010/11, 2011/12, 2012/13, 2013/14 and 2014/15 Hong Kong Company Income Tax filing are subject to Hong Kong Inland Revenue Department examination. The Company’s 2009, 2010, 2011, 2012, 2013 and 2014 PRC income tax returns are subject to PRC State Administration of Taxation examination. | |||||||||||
(m) | Foreign currency translation | ||||||||||
The accompanying consolidated financial statements are presented in United States dollars (USD). The functional currencies of the Company’s operating business based in Hong Kong and PRC are the Hong Kong Dollar (HKD) and Renminbi (RMB) respectively. The consolidated financial statements are translated into United States dollars from HKD with a ratio of USD1.00=D7.80, a fixed exchange rate maintained between Hong Kong and United States derived from the Hong Kong Monetary Authority pegging HKD and USD monetary policy. For our subsidiaries whose functional currency are the RMB, statement of income, balance sheets and cash flows are translated with a ratio of RMB1.00=D1.29 an average exchange rate during the period. | |||||||||||
Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. All of our revenue transactions are transacted in the functional currencies. We have not entered into any material transactions that are either originated, or to be settled, in currencies other than the HKD, RMB and USD. Accordingly, transaction gains or losses have not had, and are not expected to have a material effect on our results of operations. | |||||||||||
The RMB is not freely convertible into any other currencies. In addition, all foreign exchange transactions in the PRC must be conducted through authorized institutions. Accordingly, management cannot provide any assurance that the RMB underlying the consolidated financial statement amounts could have been, or could be, converted into HKD or USD at the exchange rates used to translate the functional currency into the reporting currency. | |||||||||||
(n) | Revenue recognition | ||||||||||
The Company derives revenues from resale of computer memory products, providing both ODM (Original Design Manufacturing) and OEM (Original Equipment Manufacturing) services for various electronic products, such as computer and peripherals, flash storage devices and home electronic products. The Company recognizes revenue in accordance with the ASC 605 “Revenue Recognition”. Under ASC 605, revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services are rendered, the sales price is determinable, and collectability is reasonably assured. Revenue typically is recognized at time of shipment. Sales are recorded net of discounts, rebates, and returns, which historically were not material. | |||||||||||
(o) | Advertising | ||||||||||
The Group expensed all advertising costs as incurred. Advertising expenses included in general and administrative expenses were $Nil and $1,121 for the years ended December 31, 2014 and 2013, respectively. | |||||||||||
(p) | Segment reporting | ||||||||||
The Company’s sales are generated from Hong Kong and the rest of China and substantially all of its assets are located in Hong Kong. | |||||||||||
(q) | Fair value of financial instruments | ||||||||||
The carrying amount of the Company’s cash and cash equivalents, accounts receivable, lines of credit, convertible debt, accounts payable, accrued expenses, and long-term debt approximates their estimated fair values due to the short-term maturities of those financial instruments. | |||||||||||
(r) | Comprehensive income | ||||||||||
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other consolidated financial statements. The Company has no items that represent other comprehensive income and, therefore, has not included a schedule of comprehensive income in the consolidated financial statements. | |||||||||||
(s) | Basic and diluted earnings (loss) per share | ||||||||||
In accordance with ASC No. 260 (formerly SFAS No. 128), “Earnings Per Share,” the basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share is computed similarly to basic earnings (loss) per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. | |||||||||||
(t) | Reclassification | ||||||||||
Certain amounts in the prior period have been reclassified to conform to the current consolidated financial statement presentation. | |||||||||||
(u) | Recently issued Accounting Guidance | ||||||||||
The FASB has issued Accounting Standards Update (ASU) No. 2014-07, Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements. The guidance addresses the consolidation of lessors in certain common control leasing arrangements and is based on a consensus reached by the Private Company Council (PCC). Under current U.S. GAAP, a company is required to consolidate an entity in which it has a controlling financial interest. The assessment of controlling financial interest is performed under either: (a) a voting interest model; or (b) a variable interest entity model. In a variable interest entity model, the company has a controlling financial interest when it has: (a) the power to direct the activities that most significantly affect the economic performance of the entity; and (b) the obligation to absorb losses or the right to receive benefits of the entity that could be potentially significant to the entity. To determine which model applies, a company preparing financial statements must first determine whether it has a variable interest in the entity being evaluated for consolidation and whether that entity is a variable interest entity. | |||||||||||
In February 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU improves the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in this ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. | |||||||||||
-The private company lessee and the lessor are under common control; | |||||||||||
-The private company lessee has a leasing arrangement with the lessor; | |||||||||||
-Substantially all of the activity between the private company lessee and the lessor is related to the leasing activities (including supporting leasing activities) between those two companies, and | |||||||||||
-If the private company lessee explicitly guarantees or provides collateral for any obligation of the lessor related to the asset leased by the private company, then the principal amount of the obligation at inception does not exceed the value of the asset leased by the private company from the lessor. If elected, the accounting alternative should be applied to all leasing arrangements meeting the above conditions. The alternative should be applied retrospectively to all periods presented, and is effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. | |||||||||||
Early application is permitted for all financial statements that have not yet been made available for issuance. | |||||||||||
The FASB has issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. | |||||||||||
Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. | |||||||||||
The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This disclosure will provide users with information about the ongoing trends in a reporting organization’s results from continuing operations. The amendments in this ASU enhance convergence between U.S. GAAP and International Financial Reporting Standards (IFRS). Part of the new definition of discontinued operation is based on elements of the definition of discontinued operations in IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. For most nonpublic organizations, it is effective for annual financial statements with fiscal years beginning on or after December 15, 2014. Early adoption is permitted. | |||||||||||
INVENTORIES
INVENTORIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INVENTORIES | |||||||||
INVENTORIES | NOTE 3. | INVENTORIES | |||||||
Inventories consisted of the following: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Finished goods | $ | - | $ | 3,044,793 | |||||
Less allowance for excess and obsolete inventory | - | (1,963,282 | ) | ||||||
Inventory, net | $ | - | $ | 1,081,511 | |||||
The following is a summary of the change in the Company's inventory valuation allowance: | |||||||||
December 31,2014 | 31-Dec-13 | ||||||||
Inventory valuation allowance, beginning of the year | $ | - | $ | 2,625,375 | |||||
Obsolete inventory sold | - | (662,093 | ) | ||||||
Inventory valuation allowance, end of year | $ | - | $ | 1,963,282 | |||||
PROPERTY_PLANT_AND_EQUIPMENT_N
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | |||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 4. | PROPERTY, PLANT AND EQUIPMENT, NET | |||||||
Property, plant and equipment, net comprise the following: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
At cost | |||||||||
Land and buildings | $ | - | $ | 8,574,682 | |||||
Automobiles | - | 642,241 | |||||||
Office equipment | - | 268,863 | |||||||
Leasehold improvements | - | 543,550 | |||||||
Furniture and fixtures | - | 57,302 | |||||||
Machinery | - | 668,185 | |||||||
$ | - | $ | 10,754,823 | ||||||
Less: accumulated depreciation | - | (2,541,974 | ) | ||||||
$ | - | $ | 8,212,849 | ||||||
Depreciation and amortization expense included in the general and administrative expenses for the years ended December 31, 2014 and 2013 were $Nil and $756,596 respectively. | |||||||||
Automobiles include the following amounts under capital leases: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Cost | $ | - | $ | 399,473 | |||||
Less accumulated depreciation | - | (341,876 | ) | ||||||
Total | $ | - | $ | 57,597 | |||||
CAPITAL_LEASE_OBLIGATIONS
CAPITAL LEASE OBLIGATIONS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
CAPITAL LEASE OBLIGATIONS | |||||||||
CAPITAL LEASE OBLIGATIONS | NOTE 5. | CAPITAL LEASE OBLIGATIONS | |||||||
The Company has no more capital lease obligation after December 31, 2014. Aggregate future obligations under the capital leases in effect as of December 31, 2014 and 2013 are as follows: | |||||||||
The Company has several non-cancellable capital leases relating to automobiles: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Current portion | $ | - | $ | 75,917 | |||||
Non-current portion | - | 57,511 | |||||||
$ | - | $ | 133,428 | ||||||
At December 31, 2014 and 2013, the value of automobiles under capital leases as follows: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Cost | $ | - | $ | 399,473 | |||||
Less: accumulated depreciation | - | (341,876 | ) | ||||||
$ | - | $ | 57,597 | ||||||
At December 31, 2014 and 2013, the Company had obligations under capital leases repayable as follows: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Total minimum lease payments | |||||||||
-Within one year | $ | - | $ | 81,906 | |||||
- After one year but within 5 years | - | 60,351 | |||||||
$ | - | $ | 142,257 | ||||||
Interest expenses relating to future periods | - | (8,829 | ) | ||||||
Present value of the minimum lease payments | $ | - | $ | 133,428 |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended | |
Dec. 31, 2014 | ||
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 6. | RELATED PARTY TRANSACTIONS |
Related party receivables are payable on demand upon the same terms as receivables from unrelated parties. | ||
Transactions with Aristo Technologies Limited / Mr. Yang | ||
This represented Aristo transactions with various related parties of Mr. Yang. As of December 31, 2014 and 2013, we had an outstanding receivable from Aristo / Mr. Yang, the President and Chairman of our Board of Directors, totaling $Nil and $931,652, respectively. These advances bear no interest and are payable on demand. | ||
Transactions with Solution Semiconductor (China) Limited | ||
Mr. Yang is a director and the sole beneficial owner of the equity interests of Solution Semiconductor (China) Ltd. (“Solution”). | ||
During the years ended December 31, 2014 and 2013, we received service charges of $Nil and $15,384 respectively from Solution. The service fee was charged for back office support for Solution. During the years ended December 31, 2014 and 2013, we sold products for $Nil and $3,530,784 respectively, to Solution. As of December 31, 2014 and 2013, there were no outstanding accounts receivables from Solution | ||
Two facilities located in Hong Kong owned by Solution were used by the Company as collateral for loans from DBS Bank (Hong Kong) Limited (“DBS Bank”) and The Bank of East Asia, Limited (“BEA Bank”) respectively. | ||
Transactions with Systematic Information Limited | ||
Mr. Yang, the Company’s Chief Executive Officer, majority shareholder and a director, is a director and shareholder of Systematic Information Ltd. (“Systematic Information”) with a total of 100% interest. | ||
During the years ended December 31, 2014 and 2013, we received service charges of $Nil and $3,077 respectively from Systematic Information. The service fee was charged for back office support for Systematic Information. During the years ended December 31, 2014 and 2013, we sold products for $Nil and $2,000,782 respectively, to Systematic Information. As of December 31, 2014 and 2013, there were no outstanding accounts receivables from Systematic Information. | ||
A workshop located in Hong Kong owned by Systematic Information was used by the Company as collateral for loans from BEA Bank. | ||
Transactions with City Royal Limited | ||
Mr. Yang, the Company’s Chief Executive Officer, majority shareholder and a director, is a 50% shareholder of City Royal Limited (“City”). The remaining 50% of City is owned by the wife of Mr. Yang. A residential property located in Hong Kong owned by City was used by the Company as collateral for loans from DBS Bank. | ||
Transactions with Aristo Components Limited | ||
Mr. Ben Wong, the Company’s Chief Executive Officer, is a 90% shareholder of Aristo Components Ltd. (“Aristo Comp”). The remaining 10% of Aristo Comp is owned by a non-related party. | ||
During the years ended December 31, 2014 and 2013, we received a management fee of $Nil and $12,308 respectively from Aristo Comp. The management fee was charged for back office support for Aristo Comp. During the years ended December 31, 2014 and 2013, we have no purchase from Aristo Comp. As of December 31, 2014 and December 31, 2013, there were no outstanding accounts payable to Aristo Comp. | ||
Transactions with Atlantic Ocean (HK) Limited | ||
Mr. Yang is a director and 60% shareholder of Atlantic Ocean (HK) Limited (“Ocean”). During the years ended December 31, 2014 and 2013, we sold products for $Nil and $13,924 respectively, to Ocean. As of December 31, 2014 and 2013, there were no outstanding accounts receivables from Ocean. | ||
REVOLVING_LINES_OF_CREDIT_AND_
REVOLVING LINES OF CREDIT AND LOAN FACILITIES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
REVOLVING LINES OF CREDIT AND LOAN FACILITIES: | |||||||||||||
REVOLVING LINES OF CREDIT AND LOAN FACILITIES | NOTE 7. | REVOLVING LINES OF CREDIT AND LOAN FACILITIES | |||||||||||
The summary of banking facilities at December 31, 2013 is as follows: | |||||||||||||
Granted facilities | Utilized facilities | Not Utilized Facilities | |||||||||||
Lines of credit and loan facilities | |||||||||||||
Import/Export Loan | 4,102,564 | 3,178,580 | 923,984 | ||||||||||
$ | $ | $ | |||||||||||
Bank Loans | 3,222,113 | (a) | 3,222,113 | - | |||||||||
Revolving Short Term Loan | 1,538,462 | (a) | 1,538,168 | 294 | |||||||||
Overdraft | 64,103 | (b) | 61,758 | 2,345 | |||||||||
$ | 8,927,242 | $ | 8,000,619 | $ | 926,623 | ||||||||
(a) The bank loans are combined from the summary of Note (8), total bank loans amount to USD7,630,946 with a revolving short term loan of USD1,538,168. The revolving short term loan is placed under Other Current Liabilities on the balance sheet. It has a facility limit of USD1,538,462, bearing an interest rate of 0.5% below Hong Kong prime rate per annum. | |||||||||||||
(b) Including in cash and cash equivalents | |||||||||||||
As of December 31, 2014, the Company disposed all the equity interest of ACL Holdings on September 30, 2014 and all the relevant banking facilities were included in the disposal. | |||||||||||||
BANK_LOANS
BANK LOANS | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
BANK LOANS | |||||||||
BANK LOANS | NOTE 8. | BANK LOANS | |||||||
Bank loans were comprised of the following as of December 31, 2014 and 2013 | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Installment loan provided by BEA Bank having a maturity date in July 28, 2014 and carrying an interest rate of Hong Kong dollar Prime Rate at 5.25% as of December 31, 2013 and 2012 +0.25%, payable in monthly installments of $13,291 including interest through December 2013 without any balloon payment requirements | $ | - | $ | 89,744 | |||||
Installment loan provided by BEA Bank having a maturity date in April 18, 2015 and carrying an interest rate of Hong Kong dollar Prime Rate at 5.25% as of December 31, 2013 and 2012 +0.25%, payable in monthly installments of $46,065 including interest through December 2013 without any balloon payment requirements | - | 683,761 | |||||||
Installment loan provided by DBS Bank having a maturity date in April 25, 2015 and carrying an interest rate of Hong Kong Prime dollar Rate at 5.25% as of December 31, 2013 and 2012 +0.5%, payable in monthly installments of $55,939 including interest through December 2013 without any balloon payment requirements | - | 859,612 | |||||||
Installment loan having a maturity date in 23 September, 2028 and carrying an interest rate of 2% per annum over one month HIBOR (0.2143% at December 31, 2013) from Fubon Bank payable in monthly installments of $6,283 including interest through December 2013 without any balloon payment requirements | - | 947,971 | |||||||
Term loan having a maturity due in 23 January, 2014 and carrying an interest rate of 3.88429 per annum from Fubon Bank without any balloon payment requirements | - | 641,025 | |||||||
$ | - | $ | 3,222,113 | ||||||
An analysis on the repayment of bank loan as of December 31, 2014 and December 31, 2013 are as follow: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Carrying amount that are repayable on demand or within twelve months from December 31, 2013 containing a repayable on demand clause: | |||||||||
Within twelve months | $ | - | $ | 1,937,063 | |||||
Carrying amount that are not repayable within twelve months from September 30, 2013 containing a repayable on demand clause but shown in current liabilities: | |||||||||
After 1 year, but within 2 years | $ | - | $ | 505,656 | |||||
After 2 years, but within 5 years | - | 118,775 | |||||||
After 5 years | - | 660,619 | |||||||
$ | - | $ | 1,285,050 | ||||||
$ | - | $ | 3,222,113 | ||||||
With respect to all of the debt and credit arrangements referred to in this Note 8 and Note 9, the Company pledged its assets to a bank group in Hong Kong comprised of DBS Bank, BEA Bank and Fubon Bank, as collateral for all current and future borrowings from the bank group by the Company. In addition to the above pledged collateral, the debt is also secured by: | |||||||||
1 | Collateral for loans from DBS Bank: | ||||||||
(a) | a security interest on a residential property located in Hong Kong owned by City, a related party; | ||||||||
(b) | a workshop located in Hong Kong owned by Solution, a related party; and | ||||||||
(c) | an unlimited personal guarantee by Mr. Yang | ||||||||
2 | Collateral for loans from BEA Bank: | ||||||||
(a) | a workshop located in Hong Kong owned by Systematic Information, a related party; | ||||||||
(b) | a workshop located in Hong Kong owned by Solution, a related party; and | ||||||||
(c) | an unlimited personal guarantee by Mr. Yang | ||||||||
3 | Collateral for loans from Fubon Bank | ||||||||
(a) | a security interest on two residential properties located in Hong Kong owned by Aristo, a company wholly owned by Mr. Yang; and | ||||||||
(b) | an unlimited personal guarantee by Mr. Yang | ||||||||
4 | As of December 31, 2014, the Company disposed all the equity interest of ACL Holdings on September 30, 2014 and all the relevant banking facilities were included in the disposal. |
OTHER_CURRENT_LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
OTHER CURRENT LIABILITIES | |||||||||
OTHER CURRENT LIABILITIES | NOTE 9. | other current liabilities | |||||||
The other current liabilities consisted the following as of December 31, 2014 and December 31, 2013: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Revolving short term loan | $ | - | $ | 1,538,168 | |||||
Trade deposit from customers | - | 7,725,475 | |||||||
Temporary receipts | - | 2,242,999 | |||||||
Others | - | 937,358 | |||||||
$ | - | $ | 12,444,000 | ||||||
The trade deposit from customers consists of letter of credits received from our customers which were financed by the bank and deposit received from customers for future orders. |
LOAN_FROM_A_THIRD_PARTY
LOAN FROM A THIRD PARTY | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
LOAN FROM A THIRD PARTY | |||||
LOAN FROM A THIRD PARTY | NOTE 10. | LOAN FROM A THIRD PARTY | |||
On September 26, 2013, Atlantic Components Limited entered into a Loan Agreement with Excel Precise International Limited, an unrelated third party, for a loan facility to the aggregate extent of HKD55 Million (USD7,051,282). The amount HKD55 Million has been drawn down on September 27, 2013. The rate of interest is 1.1% per month and payable on the 26th day of each calendar month. The Loan is collateral with mortgage over two Properties owned by Atlantic Components Limited and Personal Guaranteed by Wong, Fung Ming and Yang, Chung Lun. | |||||
The repayment time schedule contained in the Loan Agreement as at December 31, 2013 as follows: | |||||
Date of Repayment | Amount | ||||
The Last date of the 12-month period from September 27, 2013 | 641,026 | ||||
The Last date of the 24-month period from September 27, 2013 | 1,282,051 | ||||
The Last date of the 36-month period from September 27, 2013 | 5,128,205 | ||||
7,051,282 | |||||
Current portion | 641,026 | ||||
Non-current portion | 6,410,256 | ||||
7,051,282 | |||||
The Loan facility is to provide purpose temporary relief for the Company’s liquidity during the negotiation with new banker for a better term on a new banking facility. | |||||
As of December 31, 2014, the Company disposed all the equity interest of ACL Holdings on September 30, 2014 and all the loans from third parties were included in the disposal. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INCOME TAXES | |||||||||
INCOME TAXES | NOTE 11. | Income taxes | |||||||
Income tax (reversal) expense amounted to $Nil for 2014 and $21,887 for 2013. A reconciliation of the provision for income taxes with amounts determined by applying the statutory federal income tax rate of 34% to income before income taxes is as follows: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Computed tax at federal statutory rate | $ | - | $ | - | |||||
Tax rate differential on foreign earnings of Atlantic and Aristo, | |||||||||
Hong Kong based companies | - | (83,680 | ) | ||||||
Federal tax penalty provision | - | 80,000 | |||||||
Tax (over) under provision for Atlantic | - | (68,720 | ) | ||||||
Tax paid by Kezheng | - | 10,607 | |||||||
Net operating loss carry forward | - | 83,680 | |||||||
$ | - | $ | 21,887 | ||||||
The income tax provision consists of the following components: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Federal | $ | - | $ | 80,000 | |||||
Foreign | - | (58,113 | ) | ||||||
$ | - | $ | 21,887 | ||||||
The Components of the deferred tax assets and liabilities are as follows: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Net operating losses | $ | 666,507 | $ | 4,681,570 | |||||
Total deferred tax assets | $ | 666,507 | $ | 4,687,570 | |||||
Less: valuation allowance | (666,507 | ) | (4,687,570 | ) | |||||
$ | - | $ | - | ||||||
The Company did not have any interest and penalty not to recognize- in the income statements for the year ended December 31, 2014 and 2013 or balance sheet as of December 31, 2014 and 2013. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months. The Company’s 2011, 2012, 2013, and 2014 U.S. Corporation Income Tax Return are subject to U.S. Internal Revenue Service examination and the Company’s 2007/8, 2008/9, 2009/2010, 2010/11, 2011/12 2012/13, 2013/14 and 2014/15 Hong Kong Corporations Profits Tax Return filing are subject to Hong Kong Inland Revenue Department examination. The Company’s 2009, 2010, 2011, 2012, 2013 and 2014 PRC income tax returns are subject to PRC State Administration of Taxation examination. | |||||||||
CASH_FLOW_INFORMATION
CASH FLOW INFORMATION | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
CASH FLOW INFORMATION: | |||||||||
CASH FLOW INFORMATION | NOTE 12. | CASH FLOW INFORMATION | |||||||
Cash paid during the years ended December 31, 2014 and 2013 is as follows: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Interest paid | $ | - | $ | 1,041,095 | |||||
Income taxes (reversal) paid | $ | - | $ | - |
WEIGHTED_AVERAGE_NUMBER_OF_SHA
WEIGHTED AVERAGE NUMBER OF SHARES | 12 Months Ended | |
Dec. 31, 2014 | ||
WEIGHTED AVERAGE NUMBER OF SHARES: | ||
WEIGHTED AVERAGE NUMBER OF SHARES | NOTE 13. | WEIGHTED AVERAGE NUMBER OF SHARES |
The Company has a 2006 Incentive Equity Stock Plan, under which the Company may grant options to its employees for up to 5 million shares of common stock. There was no dilutive effect to the weighted average number of shares for the years ended December 31, 2014 and 2013 since there were no outstanding options at December 31, 2014 and 2013. |
RETIREMENT_PLAN
RETIREMENT PLAN | 12 Months Ended | |
Dec. 31, 2014 | ||
RETIREMENT PLAN | ||
RETIREMENT PLAN | NOTE 14. | RETIREMENT PLAN |
Under the Mandatory Provident Fund (“MPF”) Scheme Ordinance in Hong Kong, the Company is required to set up or participate in an MPF scheme to which both the Company and employees must make continuous contributions throughout their employment based on 5% of the employees’ earnings, subject to maximum and minimum level of income. For those earning less than the minimum level of income, they are not required to contribute but may elect to do so. However, regardless of the employees’ election, their employers must contribute 5% of the employees’ income. Contributions in excess of the maximum level of income are voluntary. All contributions to the MPF scheme are fully and immediately vested with the employees’ accounts. The contributions must be invested and accumulated until the employees’ retirement. The Company contributed and expensed $Nil for 2014 and $32,872 for 2013. | ||
COMMITMENTS
COMMITMENTS | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
COMMITMENTS | |||||||||||||
COMMITMENTS | NOTE 15. | COMMITMENTS | |||||||||||
The Company leases its facilities. The following is a schedule by years of future minimum rental payments required under operating leases that have non-cancellable lease terms in excess of one year as of December 31, 2013: | |||||||||||||
Related parties | Others | Total | |||||||||||
Year ending December 31, | |||||||||||||
2014 | $ | - | $ | 376,760 | $ | 376,760 | |||||||
2015 | - | 177,033 | 177,033 | ||||||||||
Thereafter | - | 525,100 | 525,100 | ||||||||||
Total | $ | - | $ | 1,078,893 | $ | 1,078,893 | |||||||
See Note 6 of the Notes to Consolidated Financial Statements for related party leases. All leases expire prior to December 31, 2018. Real estate taxes, insurance, and maintenance expenses are obligations of the Company. It is expected that in the normal course of business, leases that expire will be renewed or replaced by leases on other properties; thus, it is anticipated that future minimum lease commitments will likely be more than the amounts shown for 2013. Rent expense for the years ended December 31, 2013 totaled $475,571. | |||||||||||||
As of December 31, 2014, the Company disposed all the equity interest of ACL Holdings on September 30, 2014 and leases were included in the disposal. |
ACQUISITION
ACQUISITION | 12 Months Ended | |
Dec. 31, 2014 | ||
ACQUISITION | ||
ACQUISITION | NOTE 16. | ACQUISITION |
On September 28, 2012, the Company completed its acquisition of 100% equity interest of Jussey Investments Limited (“Jussey”), a company incorporated in British Virgin Islands, for aggregate purchase consideration of approximately US$2,150,000, payable by way of cash or equivalent in favor to the seller within 5 business days after the completion of the acquisition. Jussey owns 100% equity interest in eVision Telecom Limited (“eVision”), a Hong Kong incorporated company, and 80% equity interest in USmart Electronic Products Limited (“UEP”), a Hong Kong incorporated company. Jussey indirectly owns 80% of Dongguan Kezheng Electronics Limited (“Kezheng”), a wholly foreign-owned enterprise (“WFOE”) organized under the laws of the PRC by UEP. | ||
Through the acquisition, the Company has diversified its product portfolio, enhanced its distributor role to a Research and Develop (“R&D”) manufacturer with its own products and brands, entered the telecommunication industry, gained access to the 3G baseband licenses, and design and manufacturing matrix and facility. | ||
The Company accounted for this acquisition of Jussey and its subsidiaries by acquisition method of accounting. The balance sheet items were stated at fair value. The fair value was accounted upon the issuance of fair value report from an independent valuator engaged for this acquisition. | ||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | |
Dec. 31, 2014 | ||
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | NOTE 17. | SUBSEQUENT EVENTS |
In preparing these financial statements, the Company evaluated the events and transactions that occurred from January 1, 2015 through April 15, 2015, the date these financial statements were issued. The Company has intention and decided to consider acquisition of potential business in other segment to broaden and strengthen the Company profitability. Final conclusion and arrangement will be finalized and to be completed by the first quarter of the year 2015. Despite mentioned the Company determined that there were no material subsequent events | ||
UNCERTAINTY_OF_ABILITY_TO_CONT
UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN | 12 Months Ended | |
Dec. 31, 2014 | ||
UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN: | ||
UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN | NOTE 18. | UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN |
The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. The management will seek to raise funds from shareholders. | ||
For the year ended December 31, 2014, the Company has generated revenue of $1,013,241 and has incurred an accumulated deficit $4,819,559. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors noted above raise substantial doubts regarding the Company's ability to continue as a going concern. |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES (POLICIES) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
SIGNIFICANT ACCOUNTING POLICIES (POLICIES) | |||||||||||
Method of Accounting | (a) | Method of Accounting | |||||||||
The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The consolidated financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of consolidated financial statements. | |||||||||||
Principles of consolidation | (b) | Principles of consolidation | |||||||||
The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiary. All significant inter-company balances and transactions are eliminated in consolidation. | |||||||||||
The Company owned its subsidiary soon after its inception and continued to own the equity’s interests through December 31, 2014. The following table depicts the identity of the subsidiary: | |||||||||||
Name of Subsidiary | Place ofIncorporation | Attributable EquityInterest % | Registered Capital | ||||||||
ACL International Holdings Limited | Hong Kong | 0 | $ | 0.13 | |||||||
Atlantic Components Limited (1) | Hong Kong | 0 | $ | 384,615 | |||||||
Aristo Technologies Limited (2) | Hong Kong | 0 | $ | 1,282 | |||||||
Dongguan Kezheng Electronics Limited (3) | PRC | 0 | $ | 680,499 | |||||||
eVision Telecom Limited (4) | Hong Kong | 0 | $ | 25,641 | |||||||
Jussey Investments Limited (1) | BVI | 0 | $ | 1 | |||||||
USmart Electronic Products Limited (4) | Hong Kong | 0 | $ | 1.28 | |||||||
Note: (1) Wholly owned subsidiary of ACL International Holdings Limited | |||||||||||
(2) Deemed variable interest entity | |||||||||||
(3) Wholly owned subsidiary of USmart Electronic Products Limited | |||||||||||
(4) Wholly or partially owned by Jussey Investments Limited | |||||||||||
Variable Interests Entities | |||||||||||
According to ASC 810-10-25 which codified FASB Interpretation No. 46 (Revised December 2003), Consolidation of Variable Interest Entities — an interpretation of ARB No. 51 (FIN 46R), an entity that has one or more of the three characteristics set forth therein is considered a variable interest entity. One of such characteristics is that the equity investment at risk in the relevant entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by any parties, including the equity holders. | |||||||||||
ASC 810-05-08A specifies the two characteristics of a controlling financial interest in a variable interest entity (“VIE”): (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance; and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company is the primary beneficiary of Aristo because the Company can direct the activities of Aristo through the common director and major shareholder. Also, the Company extended substantial accounts receivable to Aristo and created an obligation to absorb loss if Aristo failed. Moreover, ASC 810-25-42 & 43 provides guidance on related parties treatment of VIE and specifies the relationship of de-facto agent and principal. This guidance will help to determine whether the Company will consolidate Aristo. | |||||||||||
All the above mentioned subsidiaries or deem subsidiary were no longer belonged to the Group and were not our subsidiaries and deem subsidiaries after September 30, 2014. | |||||||||||
Aristo Technologies Limited | |||||||||||
The Company sells Samsung memory chips to Aristo and allows long grace periods for Aristo to repay the open accounts receivable. Being the biggest creditor, the Company does not require Aristo to pledge assets or enter into any agreements to bind Aristo to specific repayment terms. The Company does not experience any bad debt from Aristo. Hence, the Company does not provide any bad debt provision derived from Aristo. Although, the Company is not involved in Aristo’s daily operation, it believes that there will not be significant additional risk derived from the trading relationship and transactions with Aristo. | |||||||||||
Aristo is engaged in the marketing, selling and servicing of computer products and accessories including semiconductors, LCD products, mass storage devices, consumer electronics, computer peripherals and electronic components for different generations of computer related products. Aristo carries various brands of products such as Samsung, Hynix, Micron, Elpida, Qimonda, Lexar, Dane-Elec, Elixir, SanDisk and Winbond. Aristo 2013 sales were around 7 million; it was only a small distributor that accommodated special requirements for specific customers. | |||||||||||
Aristo supplies different generations of computer related products. Old generation products will move slowly owing to lower market demand. According to the management experience and estimation on the actual market situation, old products carrying on hand for ten years will have no resell value. Therefore, inventories on hand over ten years will be written-off by Aristo immediately. | |||||||||||
The Company sold to Aristo in order to fulfill Aristo’s periodic need for Samsung memory products based on prevailing market prices, which Aristo, in turn, sells to its customers. The sales to Aristo for fiscal year 2014 were $Nil. For fiscal year 2013 were $3,337,735 with account receivable of $4,850,769 as of December 31, 2013. For fiscal year 2012 were $106,031 with account receivable of $5,323,933 as of December 31, 2012. For fiscal year 2011 were $7,086,379 with accounts receivable of $16,871,739 as of December 31, 2011. For fiscal year 2010 were $7,123,769 with accounts receivable of $14,073,937 as of December 31, 2010. | |||||||||||
The Company purchases from Aristo, from time to time, LCD panels, Samsung memory chips, DRAM, Flash memory, central processing units, external hard disks, DVD readers and writers that the Company cannot obtain from Samsung directly due to supply limitations. | |||||||||||
Acquisition | |||||||||||
The Company uses the acquisition method of accounting for business combinations which requires that the assets acquired and liabilities assumed be recorded at the date of the acquisition at their respective fair values. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. If the fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined at the date of acquisition, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of acquired business are reflected in the acquirer’s consolidated financial statements and results of operations after the date of the acquisition. | |||||||||||
Jointly-controlled entity | (c) | Jointly-controlled entity | |||||||||
A jointly-controlled entity is a corporate joint venture that is subject to joint control, resulting in none of the participating parties having unilateral control over the economic activity of the jointly-controlled entity. | |||||||||||
The Group’s investment in a jointly-controlled entity is stated in equity method for the consolidated statement of financial position the Group’s shares of the equity of a jointly-controlled entity and the consolidated income statement and consolidated reserves, respectively. | |||||||||||
Use of Estimates, Policy | (d) | Use of estimates | |||||||||
The preparation of consolidated financial statements that conform with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time, however, actual results could differ materially from those estimates. | |||||||||||
Economic and political risks | (e) | Economic and political risks | |||||||||
The Company’s operations are conducted in Hong Kong and China. A large number of customers are located in Southern China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in Hong Kong and China, and by the general state of the economy in Hong Kong and China. | |||||||||||
The Company’s operations and customers in Hong Kong and Southern China are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments, and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in Hong Kong and China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. | |||||||||||
Property, Plant and Equipment, Policy | (f) | Property, plant and equipment | |||||||||
Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. | |||||||||||
Estimated useful lives of the plant and equipment are as follows: | |||||||||||
Automobiles | 3 1/3 years | ||||||||||
Computers | 5 years | ||||||||||
Leasehold improvement | 5 years | ||||||||||
Land and buildings | By estimated useful life | ||||||||||
Office equipment | 5 years | ||||||||||
Machinery | 10 years | ||||||||||
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. | |||||||||||
Account receivable | (g) | Account receivable | |||||||||
Accounts receivable is carried at the net invoiced value charged to customer. The Company records an allowance for doubtful accounts to cover estimated credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. The Company evaluates the credit risk of its customers utilizing historical data and estimates of future performance. | |||||||||||
Accounting for the impairment of long-lived assets | (h) | Accounting for the impairment of long-lived assets | |||||||||
The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC No. 360 (formerly Statement of Financial Accounting Standards No. 144). The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose. | |||||||||||
During the reporting years, there was no impairment loss. | |||||||||||
Cash and Cash Equivalents, Policy | (i) | Cash and cash equivalents | |||||||||
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts in Hong Kong. The Company does not maintain any bank accounts in the United States of America. | |||||||||||
Inventories | (j) | Inventories | |||||||||
Inventories are stated at the lower of cost or market and are comprised of purchased computer technology resale products. Cost is determined using the first-in, first-out method. | |||||||||||
Lease assets | (k) | Lease assets | |||||||||
Leases that substantially transfer all the benefits and risks of ownership of assets to the company are accounted for as capital leases. At the inception of a capital lease, the asset is recorded together with its long term obligation (excluding interest element) to reflect the purchase and the financing. | |||||||||||
Leases which do not transfer substantially all the risks and rewards of ownership to the company are classified as operating leases. Payments made under operating leases are charged to income statement in equal installments over the accounting periods covered by the lease term. Lease incentives received are recognized in income statement as an integral part of the aggregate net lease payments made. Contingent rentals are charged to income statement in the accounting period which they are incurred. | |||||||||||
Income Taxes | (l) Income taxes | ||||||||||
We are governed by the Internal Revenue Code of the United States, the Hong Kong Inland Revenue Department and the PRC’s Income Tax Laws. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income of the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Realization of the deferred tax asset is dependent on generating sufficient taxable income in future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||||||||
The Company did not have any interest or penalty recognized in the income statements for the period ended December 31, 2014 and December 31, 2013 or the balance sheet, as of December 31, 2014 and December 31, 2013. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months. The Company’s 2011, 2012, 2013 and 2014 U.S. federal income tax returns are subject to U.S. Internal Revenue Service examination and the Company’s 2007/8, 2008/9, 2009/2010, 2010/11, 2011/12, 2012/13, 2013/14 and 2014/15 Hong Kong Company Income Tax filing are subject to Hong Kong Inland Revenue Department examination. The Company’s 2009, 2010, 2011, 2012, 2013 and 2014 PRC income tax returns are subject to PRC State Administration of Taxation examination. | |||||||||||
Foreign Currency Translations | (m) | Foreign currency translation | |||||||||
The accompanying consolidated financial statements are presented in United States dollars (USD). The functional currencies of the Company’s operating business based in Hong Kong and PRC are the Hong Kong Dollar (HKD) and Renminbi (RMB) respectively. The consolidated financial statements are translated into United States dollars from HKD with a ratio of USD1.00=D7.80, a fixed exchange rate maintained between Hong Kong and United States derived from the Hong Kong Monetary Authority pegging HKD and USD monetary policy. For our subsidiaries whose functional currency are the RMB, statement of income, balance sheets and cash flows are translated with a ratio of RMB1.00=D1.29 an average exchange rate during the period. | |||||||||||
Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. All of our revenue transactions are transacted in the functional currencies. We have not entered into any material transactions that are either originated, or to be settled, in currencies other than the HKD, RMB and USD. Accordingly, transaction gains or losses have not had, and are not expected to have a material effect on our results of operations. | |||||||||||
The RMB is not freely convertible into any other currencies. In addition, all foreign exchange transactions in the PRC must be conducted through authorized institutions. Accordingly, management cannot provide any assurance that the RMB underlying the consolidated financial statement amounts could have been, or could be, converted into HKD or USD at the exchange rates used to translate the functional currency into the reporting currency. | |||||||||||
Revenue Recognition, Policy | (n) | Revenue recognition | |||||||||
The Company derives revenues from resale of computer memory products, providing both ODM (Original Design Manufacturing) and OEM (Original Equipment Manufacturing) services for various electronic products, such as computer and peripherals, flash storage devices and home electronic products. The Company recognizes revenue in accordance with the ASC 605 “Revenue Recognition”. Under ASC 605, revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services are rendered, the sales price is determinable, and collectability is reasonably assured. Revenue typically is recognized at time of shipment. Sales are recorded net of discounts, rebates, and returns, which historically were not material. | |||||||||||
Advertising | (o) | Advertising | |||||||||
The Group expensed all advertising costs as incurred. Advertising expenses included in general and administrative expenses were $Nil and $1,121 for the years ended December 31, 2014 and 2013, respectively. | |||||||||||
Segment Reporting, Policy | (p) | Segment reporting | |||||||||
The Company’s sales are generated from Hong Kong and the rest of China and substantially all of its assets are located in Hong Kong. | |||||||||||
Fair Value of Financial Instruments, Policy | (q) | Fair value of financial instruments | |||||||||
The carrying amount of the Company’s cash and cash equivalents, accounts receivable, lines of credit, convertible debt, accounts payable, accrued expenses, and long-term debt approximates their estimated fair values due to the short-term maturities of those financial instruments. | |||||||||||
Comprehensive Income, Policy | (r) | Comprehensive income | |||||||||
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other consolidated financial statements. The Company has no items that represent other comprehensive income and, therefore, has not included a schedule of comprehensive income in the consolidated financial statements. | |||||||||||
Basic and diluted earnings (loss) per share | (s) | Basic and diluted earnings (loss) per share | |||||||||
In accordance with ASC No. 260 (formerly SFAS No. 128), “Earnings Per Share,” the basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share is computed similarly to basic earnings (loss) per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. | |||||||||||
Reclassification, Policy | (t) | Reclassification | |||||||||
Certain amounts in the prior period have been reclassified to conform to the current consolidated financial statement presentation. | |||||||||||
Recently issued Accounting Guidance | (u) | Recently issued Accounting Guidance | |||||||||
The FASB has issued Accounting Standards Update (ASU) No. 2014-07, Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements. The guidance addresses the consolidation of lessors in certain common control leasing arrangements and is based on a consensus reached by the Private Company Council (PCC). Under current U.S. GAAP, a company is required to consolidate an entity in which it has a controlling financial interest. The assessment of controlling financial interest is performed under either: (a) a voting interest model; or (b) a variable interest entity model. In a variable interest entity model, the company has a controlling financial interest when it has: (a) the power to direct the activities that most significantly affect the economic performance of the entity; and (b) the obligation to absorb losses or the right to receive benefits of the entity that could be potentially significant to the entity. To determine which model applies, a company preparing financial statements must first determine whether it has a variable interest in the entity being evaluated for consolidation and whether that entity is a variable interest entity. | |||||||||||
In February 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU improves the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in this ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. | |||||||||||
-The private company lessee and the lessor are under common control; | |||||||||||
-The private company lessee has a leasing arrangement with the lessor; | |||||||||||
-Substantially all of the activity between the private company lessee and the lessor is related to the leasing activities (including supporting leasing activities) between those two companies, and | |||||||||||
-If the private company lessee explicitly guarantees or provides collateral for any obligation of the lessor related to the asset leased by the private company, then the principal amount of the obligation at inception does not exceed the value of the asset leased by the private company from the lessor. If elected, the accounting alternative should be applied to all leasing arrangements meeting the above conditions. The alternative should be applied retrospectively to all periods presented, and is effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. | |||||||||||
Early application is permitted for all financial statements that have not yet been made available for issuance. | |||||||||||
The FASB has issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. | |||||||||||
Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. | |||||||||||
The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This disclosure will provide users with information about the ongoing trends in a reporting organization’s results from continuing operations. The amendments in this ASU enhance convergence between U.S. GAAP and International Financial Reporting Standards (IFRS). Part of the new definition of discontinued operation is based on elements of the definition of discontinued operations in IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. For most nonpublic organizations, it is effective for annual financial statements with fiscal years beginning on or after December 15, 2014. Early adoption is permitted. | |||||||||||
PRINCIPLES_OF_CONSOLIDATION_TA
PRINCIPLES OF CONSOLIDATION (TABLES) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
PRINCIPLES OF CONSOLIDATION (TABLES): | |||||||||||
PRINCIPLES OF CONSOLIDATION (TABLES) | The Company owned its subsidiary soon after its inception and continued to own the equity’s interests through December 31, 2014. The following table depicts the identity of the subsidiary: | ||||||||||
Name of Subsidiary | Place ofIncorporation | Attributable EquityInterest % | Registered Capital | ||||||||
ACL International Holdings Limited | Hong Kong | 0 | $ | 0.13 | |||||||
Atlantic Components Limited (1) | Hong Kong | 0 | $ | 384,615 | |||||||
Aristo Technologies Limited (2) | Hong Kong | 0 | $ | 1,282 | |||||||
Dongguan Kezheng Electronics Limited (3) | PRC | 0 | $ | 680,499 | |||||||
eVision Telecom Limited (4) | Hong Kong | 0 | $ | 25,641 | |||||||
Jussey Investments Limited (1) | BVI | 0 | $ | 1 | |||||||
USmart Electronic Products Limited (4) | Hong Kong | 0 | $ | 1.28 | |||||||
Note: (1) Wholly owned subsidiary of ACL International Holdings Limited | |||||||||||
(2) Deemed variable interest entity | |||||||||||
(3) Wholly owned subsidiary of USmart Electronic Products Limited | |||||||||||
(4) Wholly or partially owned by Jussey Investments Limited | |||||||||||
INVENTORIES_TABLES
INVENTORIES (TABLES) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INVENTORIES (TABLES): | |||||||||
Inventories consisted of the following: | Inventories consisted of the following: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Finished goods | $ | - | $ | 3,044,793 | |||||
Less allowance for excess and obsolete inventory | - | (1,963,282 | ) | ||||||
Inventory, net | $ | - | $ | 1,081,511 | |||||
Change in the Company's inventory valuation allowance: | The following is a summary of the change in the Company's inventory valuation allowance: | ||||||||
December 31,2014 | 31-Dec-13 | ||||||||
Inventory valuation allowance, beginning of the year | $ | - | $ | 2,625,375 | |||||
Obsolete inventory sold | - | (662,093 | ) | ||||||
Inventory valuation allowance, end of year | $ | - | $ | 1,963,282 |
PROPERTY_PLANT_AND_EQUIPMENT_N1
PROPERTY, PLANT AND EQUIPMENT, NET (TABLES) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
PROPERTY, PLANT AND EQUIPMENT, NET (TABLES): | |||||||||
Property, plant and equipment, net comprise the following | Property, plant and equipment, net comprise the following: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
At cost | |||||||||
Land and buildings | $ | - | $ | 8,574,682 | |||||
Automobiles | - | 642,241 | |||||||
Office equipment | - | 268,863 | |||||||
Leasehold improvements | - | 543,550 | |||||||
Furniture and fixtures | - | 57,302 | |||||||
Machinery | - | 668,185 | |||||||
$ | - | $ | 10,754,823 | ||||||
Less: accumulated depreciation | - | (2,541,974 | ) | ||||||
$ | - | $ | 8,212,849 | ||||||
Automobiles include the following amounts under capital leases: | Automobiles include the following amounts under capital leases: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Cost | $ | - | $ | 399,473 | |||||
Less accumulated depreciation | - | (341,876 | ) | ||||||
Total | $ | - | $ | 57,597 |
CAPITAL_LEASE_OBLIGATIONS_TABL
CAPITAL LEASE OBLIGATIONS (TABLES) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
CAPITAL LEASE OBLIGATIONS (TABLES): | |||||||||
Company has several non-cancellable capital leases relating to automobiles | The Company has several non-cancellable capital leases relating to automobiles: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Current portion | $ | - | $ | 75,917 | |||||
Non-current portion | - | 57,511 | |||||||
$ | - | $ | 133,428 | ||||||
At December 31, 2014 and 2013, the value of automobiles under capital leases as follows: | At December 31, 2014 and 2013, the value of automobiles under capital leases as follows: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Cost | $ | - | $ | 399,473 | |||||
Less: accumulated depreciation | - | (341,876 | ) | ||||||
$ | - | $ | 57,597 | ||||||
December 31, 2014 and 2013, the Company had obligations under capital leases repayable as follows | At December 31, 2014 and 2013, the Company had obligations under capital leases repayable as follows: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Total minimum lease payments | |||||||||
-Within one year | $ | - | $ | 81,906 | |||||
- After one year but within 5 years | - | 60,351 | |||||||
$ | - | $ | 142,257 | ||||||
Interest expenses relating to future periods | - | (8,829 | ) | ||||||
Present value of the minimum lease payments | $ | - | $ | 133,428 |
REVOLVING_LINES_OF_CREDIT_AND_1
REVOLVING LINES OF CREDIT AND LOAN FACILITIES (TABLES) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
REVOLVING LINES OF CREDIT AND LOAN FACILITIES (TABLES): | |||||||||||||
The summary of banking facilities at December 31, 2013 is as follows: | The summary of banking facilities at December 31, 2013 is as follows: | ||||||||||||
Granted facilities | Utilized facilities | Not Utilized Facilities | |||||||||||
Lines of credit and loan facilities | |||||||||||||
Import/Export Loan | 4,102,564 | 3,178,580 | 923,984 | ||||||||||
$ | $ | $ | |||||||||||
Bank Loans | 3,222,113 | (a) | 3,222,113 | - | |||||||||
Revolving Short Term Loan | 1,538,462 | (a) | 1,538,168 | 294 | |||||||||
Overdraft | 64,103 | (b) | 61,758 | 2,345 | |||||||||
$ | 8,927,242 | $ | 8,000,619 | $ | 926,623 |
BANK_LOANS_TABLES
BANK LOANS (TABLES) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
BANK LOANS (TABLES): | |||||||||
Bank loans were comprised of the following as of December 31, 2014 and 2013 | Bank loans were comprised of the following as of December 31, 2014 and 2013 | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Installment loan provided by BEA Bank having a maturity date in July 28, 2014 and carrying an interest rate of Hong Kong dollar Prime Rate at 5.25% as of December 31, 2013 and 2012 +0.25%, payable in monthly installments of $13,291 including interest through December 2013 without any balloon payment requirements | $ | - | $ | 89,744 | |||||
Installment loan provided by BEA Bank having a maturity date in April 18, 2015 and carrying an interest rate of Hong Kong dollar Prime Rate at 5.25% as of December 31, 2013 and 2012 +0.25%, payable in monthly installments of $46,065 including interest through December 2013 without any balloon payment requirements | - | 683,761 | |||||||
Installment loan provided by DBS Bank having a maturity date in April 25, 2015 and carrying an interest rate of Hong Kong Prime dollar Rate at 5.25% as of December 31, 2013 and 2012 +0.5%, payable in monthly installments of $55,939 including interest through December 2013 without any balloon payment requirements | - | 859,612 | |||||||
Installment loan having a maturity date in 23 September, 2028 and carrying an interest rate of 2% per annum over one month HIBOR (0.2143% at December 31, 2013) from Fubon Bank payable in monthly installments of $6,283 including interest through December 2013 without any balloon payment requirements | - | 947,971 | |||||||
Term loan having a maturity due in 23 January, 2014 and carrying an interest rate of 3.88429 per annum from Fubon Bank without any balloon payment requirements | - | 641,025 | |||||||
$ | - | $ | 3,222,113 | ||||||
An analysis on the repayment of bank loan | An analysis on the repayment of bank loan as of December 31, 2014 and December 31, 2013 are as follow: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Carrying amount that are repayable on demand or within twelve months from December 31, 2013 containing a repayable on demand clause: | |||||||||
Within twelve months | $ | - | $ | 1,937,063 | |||||
Carrying amount that are not repayable within twelve months from September 30, 2013 containing a repayable on demand clause but shown in current liabilities: | |||||||||
After 1 year, but within 2 years | $ | - | $ | 505,656 | |||||
After 2 years, but within 5 years | - | 118,775 | |||||||
After 5 years | - | 660,619 | |||||||
$ | - | $ | 1,285,050 | ||||||
$ | - | $ | 3,222,113 |
OTHER_CURRENT_LIABILITIES_TABL
OTHER CURRENT LIABILITIES (TABLES) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
OTHER CURRENT LIABILITIES (TABLES): | |||||||||
The other current liabilities consisted the following as of December 31, 2014 and December 31, 2013 | The other current liabilities consisted the following as of December 31, 2014 and December 31, 2013: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Revolving short term loan | $ | - | $ | 1,538,168 | |||||
Trade deposit from customers | - | 7,725,475 | |||||||
Temporary receipts | - | 2,242,999 | |||||||
Others | - | 937,358 | |||||||
$ | - | $ | 12,444,000 |
LOAN_FROM_A_THIRD_PARTY_TABLES
LOAN FROM A THIRD PARTY (TABLES) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
LOAN FROM A THIRD PARTY (TABLES): | |||||
LOAN FROM A THIRD PARTY (TABLES) | The repayment time schedule contained in the Loan Agreement as at December 31, 2013 as follows: | ||||
Date of Repayment | Amount | ||||
The Last date of the 12-month period from September 27, 2013 | 641,026 | ||||
The Last date of the 24-month period from September 27, 2013 | 1,282,051 | ||||
The Last date of the 36-month period from September 27, 2013 | 5,128,205 | ||||
7,051,282 | |||||
Current portion | 641,026 | ||||
Non-current portion | 6,410,256 | ||||
7,051,282 |
INCOME_TAXES_TABLES
INCOME TAXES (TABLES) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
INCOME TAXES (TABLES): | |||||||||
A reconciliation of the provision for income taxes | A reconciliation of the provision for income taxes with amounts determined by applying the statutory federal income tax rate of 34% to income before income taxes is as follows: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Computed tax at federal statutory rate | $ | - | $ | - | |||||
Tax rate differential on foreign earnings of Atlantic and Aristo, | |||||||||
Hong Kong based companies | - | (83,680 | ) | ||||||
Federal tax penalty provision | - | 80,000 | |||||||
Tax (over) under provision for Atlantic | - | (68,720 | ) | ||||||
Tax paid by Kezheng | - | 10,607 | |||||||
Net operating loss carry forward | - | 83,680 | |||||||
$ | - | $ | 21,887 | ||||||
The income tax provision consists of the following components: | The income tax provision consists of the following components: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Federal | $ | - | $ | 80,000 | |||||
Foreign | - | (58,113 | ) | ||||||
$ | - | $ | 21,887 | ||||||
The Components of the deferred tax assets and liabilities are as follows | The Components of the deferred tax assets and liabilities are as follows: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Net operating losses | $ | 666,507 | $ | 4,681,570 | |||||
Total deferred tax assets | $ | 666,507 | $ | 4,687,570 | |||||
Less: valuation allowance | (666,507 | ) | (4,687,570 | ) | |||||
$ | - | $ | - |
CASH_FLOW_INFORMATION_TABLES
CASH FLOW INFORMATION (TABLES) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
CASH FLOW INFORMATION (TABLES): | |||||||||
CASH FLOW INFORMATION (TABLES) | Cash paid during the years ended December 31, 2014 and 2013 is as follows: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Interest paid | $ | - | $ | 1,041,095 | |||||
Income taxes (reversal) paid | $ | - | $ | - | |||||
COMMITMENTS_TABLES
COMMITMENTS (TABLES) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
COMMITMENTS (TABLES): | |||||||||||||
COMMITMENTS (TABLES) | The following is a schedule by years of future minimum rental payments required under operating leases that have non-cancellable lease terms in excess of one year as of December 31, 2013: | ||||||||||||
Related parties | Others | Total | |||||||||||
Year ending December 31, | |||||||||||||
2014 | $ | - | $ | 376,760 | $ | 376,760 | |||||||
2015 | - | 177,033 | 177,033 | ||||||||||
Thereafter | - | 525,100 | 525,100 | ||||||||||
Total | $ | - | $ | 1,078,893 | $ | 1,078,893 |
Organization_Details
Organization (Details) | Sep. 17, 2002 |
Organization | |
ACL International Holdings Limited owns equity interest | 30.00% |
Business relating to procurement of Atlantic | 90.00% |
Principles_Of_Consolidation_De
Principles Of Consolidation (Details) (USD $) | Dec. 31, 2014 |
Principles Of Consolidation | |
ACL International Holdings Limited Attributable Equity Interest | 0.00% |
ACL International Holdings Limited Registered Capital | $0.13 |
Atlantic Components Limited (1) Attributable Equity Interest | 0.00% |
Atlantic Components Limited (1) Registered Capital | 384,615 |
Aristo Technologies Limited (2) Attributable Equity Interest | 0.00% |
Aristo Technologies Limited (2) Registered Capital | 1,282 |
Dongguan Kezheng Electronics Limited (3) Attributable Equity Interest | 0.00% |
Dongguan Kezheng Electronics Limited (3) Registered Capital | 680,499 |
E Vision Telecom Limited (4) Attributable Equity Interest | 0.00% |
E Vision Telecom Limited (4) Registered Capital | 25,641 |
Jussey Investments Limited (1) Attributable Equity Interest | 0.00% |
Jussey Investments Limited (1) Registered Capital | 1 |
USmart Electronic Products Limited (4) Attributable Equity Interest | 0.00% |
USmart Electronic Products Limited (4) Registered Capital | $1.28 |
Principles_Of_Consolidation_of
Principles Of Consolidation of Aristo Technologies (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Principles Of Consolidation of Aristo Technologies | |||||
Sales to Aristo | $0 | $3,337,735 | $106,031 | $7,086,379 | $7,123,769 |
Sales to Aristo with account receivable | $4,850,769 | $5,323,933 | $16,871,739 | $14,073,937 |
Estimated_Useful_Lives_Of_Plan
Estimated Useful Lives Of Plant And Equipment (Details) | Dec. 31, 2014 |
Estimated Useful Lives Of Plant And Equipment | |
Automobiles in years | 4 |
Computers in years | 5 |
Leasehold improvement in years | 5 |
Land and buildings | 0 |
Office equipment in years | 5 |
Machinery in years | 10 |
Advertising_Details
Advertising (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Advertising {1} | ||
Advertising expenses | $0 | $1,121 |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Inventories {2} | ||
Finished goods | $0 | $3,044,793 |
Less allowance for excess and obsolete inventory | -1,963,282 | |
Inventory, net | $1,081,511 |
Summary_Of_Change_In_Inventory
Summary Of Change In Inventory Valuation Allowance (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Summary Of Change In Inventory Valuation Allowance | ||
Inventory valuation allowance, beginning of the year | $0 | $2,625,375 |
Obsolete inventory sold | -662,093 | |
Inventory valuation allowance, end of year | $1,963,282 |
Property_Plant_And_Equipment_D
Property, Plant And Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant And Equipment | ||
Land and buildings | $0 | $8,574,682 |
Automobiles | 642,241 | |
Office equipment | 268,863 | |
Leasehold improvements | 543,550 | |
Furniture and fixtures | 57,302 | |
Machinery | 668,185 | |
Total Property, Plant And Equipment | 10,754,823 | |
Less: accumulated depreciation | -2,541,974 | |
Property, Plant And Equipment Net | $8,212,849 |
Depreciation_And_Amortization_
Depreciation And Amortization (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Depreciation And Amortization | ||
Depreciation and amortization expense | $0 | $756,596 |
Property_Plant_And_Equipment_C
Property, Plant And Equipment Capital Leases (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant And Equipment Capital Leases | ||
Cost | $0 | $399,473 |
Less accumulated depreciation | -341,876 | |
Total Property, Plant And Equipment Capital Leases | $57,597 |
NonCancellable_Capital_Leases_
Non-Cancellable Capital Leases (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Non-Cancellable Capital Leases | ||
Current portion | $75,917 | |
Non-current portion | 57,511 | |
Total Non-Cancellable Capital Leases | $0 | $133,428 |
Capital_Leases_Details
Capital Leases (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Capital Leases | ||
Cost | $399,473 | |
Less: accumulated depreciation | -341,876 | |
Total Capital Leases | $0 | $57,597 |
Obligations_Under_Capital_Leas
Obligations Under Capital Leases (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Obligations Under Capital Leases | ||
Total minimum lease payments -Within one year | $0 | $81,906 |
Total minimum lease payments - After one year but within 5 years | 60,351 | |
Capital Leases, Future Minimum Payments Receivable | 142,257 | |
Interest expenses relating to future periods | -8,829 | |
Present value of the minimum lease payments | $133,428 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transactions | ||
Outstanding receivable from Aristo | $0 | $931,652 |
Received service charges from Solution | 0 | 15,384 |
Sold products to Solution | 0 | 3,530,784 |
Received service charges from Systematic Information | 0 | 3,077 |
Sold products to Systematic Information | 0 | 2,000,782 |
Shareholder of City Royal Limited | 50.00% | |
Shareholder of City Royal Limited remaining owned by Mr. Yang | 50.00% | |
Shareholder of Aristo Components Ltd | 90.00% | |
Remaining of Aristo Comp is owned by a non-related party | 10.00% | |
Management fee from Aristo Comp | 0 | 12,308 |
Shareholder of Atlantic Ocean Limited | 60.00% | |
Sold products to Atlantic Ocean | $0 | $13,924 |
Summary_Of_Banking_Facilities_
Summary Of Banking Facilities (Details) (USD $) | Dec. 31, 2013 |
Granted Lines of credit and loan facilities | |
Granted facilities Import/Export Loan | $4,102,564 |
Granted facilities Bank Loans | 3,222,113 |
Granted facilities Revolving Short Term Loan | 1,538,462 |
Granted facilities Overdraft | 64,103 |
Total Granted Lines of credit and loan facilities | 8,927,242 |
Utilized Lines of credit and loan facilities | |
Utilized facilities Import/Export Loan | 3,178,580 |
Utilized facilities Bank Loans | 3,222,113 |
Utilized facilities Revolving Short Term Loan | 1,538,168 |
Utilized facilities Overdraft | 61,758 |
Total Utilized Lines of credit and loan facilities | 8,000,619 |
Not Utilized Lines of credit and loan facilities | |
Not Utilized facilities Import/Export Loan | 923,984 |
Not Utilized facilities Bank Loans | 0 |
Not Utilized facilities Revolving Short Term Loan | 294 |
Not Utilized facilities Overdraft | 2,345 |
Total Not Utilized Lines of credit and loan facilities | $926,623 |
Loan_Details
Loan (Details) (USD $) | Dec. 31, 2013 |
Loan | |
Total bank loans amount | $630,946 |
Revolving short term loan | 538,168 |
Facility limit | $538,462 |
Bearing an interest rate | 0.50% |
Bank_Loans_Details
Bank Loans (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Bank Loans {1} | ||
Installment loan provided by BEA Bank having a maturity date in July 28, 2014 | $0 | $89,744 |
Installment loan provided by BEA Bank having a maturity date in April 18, 2015 | 683,761 | |
Installment loan provided by DBS Bank having a maturity date in April 25, 2015 | 859,612 | |
Installment loan having a maturity date in 23 September, 2028 | 947,971 | |
Term loan having a maturity due in 23 January, 2014 | 641,025 | |
Total term loans | $3,222,113 |
Bank_Loans_Parentheticals_Deta
Bank Loans Parentheticals (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Bank Loans Parentheticals | ||
Interest rate on loan by BEA Bank | 5.25% | 5.25% |
Increase in Interest rate on loan by BEA Bank | 0.25% | 0.25% |
BEA Bank payable in monthly installments | $13,291 | $13,291 |
Interest rate on loan by BEA Bank | 5.25% | 5.25% |
Increase in Interest rate on loan by BEA Bank | 0.25% | 0.25% |
BEA Bank payable in monthly installments | 46,065 | 46,065 |
Interest rate on loan by DBS Bank | 5.25% | 5.25% |
Increase in Interest rate on loan by DBS Bank | 0.50% | 0.50% |
DBS Bank payable in monthly installments | 55,939 | 55,939 |
Interest rate per annum | 2.00% | |
One month HIBOR | 0.21% | |
Fubon Bank payable in monthly installments | $6,283 | |
Term loan Interest rate per annum | 3.88% |
Repayment_Of_Bank_Loan_Details
Repayment Of Bank Loan (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Carrying amount that are repayable on demand or within twelve months from December 31, 2013 containing a repayable on demand clause: | ||
Within twelve months | $0 | $1,937,063 |
Carrying amount that are not repayable within twelve months from September 30, 2013 containing a repayable on demand clause but shown in current liabilities: | ||
After 1 year, but within 2 years | 505,656 | |
After 2 years, but within 5 years | 118,775 | |
After 5 years | 660,619 | |
Long-term Debt, Excluding Current Maturities | 1,285,050 | |
Long-term Debt | $3,222,113 |
Other_Current_Liabilities_Deta
Other Current Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Other Current Liabilities | ||
Revolving short term loan | $1,538,168 | |
Trade deposit from customers | 7,725,475 | |
Temporary receipts | 2,242,999 | |
Others | 937,358 | |
Total Other Current Liabilities | $0 | $12,444,000 |
Third_Party_Loan_Details
Third Party Loan (Details) (USD $) | Sep. 26, 2013 |
Third Party Loan | |
Unrelated third party loan facility (HKD55 Million) | $7,051,282 |
Interest rate on third party loan | 1.10% |
Repayment_Time_Schedule_In_Loa
Repayment Time Schedule In Loan Agreement (Details) (USD $) | Dec. 31, 2013 |
Repayment Time Schedule In Loan Agreement | |
The Last date of the 12-month period from September 27, 2013 | $641,026 |
The Last date of the 24-month period from September 27, 2013 | 1,282,051 |
The Last date of the 36-month period from September 27, 2013 | 5,128,205 |
Total Repayment Time Schedule In Loan Agreement | 7,051,282 |
Current portion | 641,026 |
Non-current portion | 6,410,256 |
Repayment Time Schedule In Loan Agreement net | $7,051,282 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Income Taxes Details | ||
Income tax expense | $0 | $21,887 |
Statutory Federal income tax rate | 34.00% | |
Computed tax at federal statutory rate | 0.00% | 0.00% |
Tax rate differential on foreign earnings of Atlantic and Aristo,Hong Kong based companies | -83,680 | |
Federal tax penalty provision | 80,000 | |
Tax (over) under provision for Atlantic | -68,720 | |
Tax paid by Kezheng | 10,607 | |
Net operating loss carry forward | 83,680 | |
Income taxes expense (Benefit) | $21,887 |
Income_tax_provision_Details
Income tax provision (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Income tax provision | ||
Federal | $0 | $80,000 |
Foreign | -58,113 | |
Income tax provision | $21,887 |
Deferred_Tax_Assets_And_Liabil
Deferred Tax Assets And Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Tax Assets And Liabilities | ||
Net operating losses | $666,507 | $4,681,570 |
Total deferred tax assets | 666,507 | 4,687,570 |
Less: valuation allowance | -666,507 | -4,687,570 |
Net deferred tax assets | $0 |
Cash_Flow_Information_Details
Cash Flow Information (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Cash Flow Information Details | ||
Interest paid | $1,041,095 | |
Income taxes (reversal) paid | $0 |
Recovered_Sheet1
Weighted Average Number Of Shares (Details) | Dec. 31, 2014 |
Weighted Average Number Of Shares | |
Company may grant options to its employees | 5,000,000 |
Retirement_Plan_Details
Retirement Plan (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Retirement Plan | ||
Company contributed and expensed maximum level of income | $0 | $32,872 |
Commitments_Details
Commitments (Details) (USD $) | Dec. 31, 2013 |
Related parties | |
Future minimum rental payments 2014 | $0 |
Future minimum rental payments 2015 | 0 |
Future minimum rental paymentsThereafter | 0 |
Future minimum rental paymentsTotal | 0 |
Others | |
Future minimum rental payments 2014 | 376,760 |
Future minimum rental payments 2015 | 177,033 |
Future minimum rental paymentsThereafter | 525,100 |
Future minimum rental paymentsTotal | 1,078,893 |
Total | |
Future minimum rental payments 2014 | 376,760 |
Future minimum rental payments 2015 | 177,033 |
Future minimum rental paymentsThereafter | 525,100 |
Future minimum rental paymentsTotal | $1,078,893 |
Rent_expense_Details
Rent expense (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Rent Expense | |
Rent expense for the years ended | $475,571 |
Acquisition_Details
Acquisition (Details) (USD $) | Sep. 28, 2012 |
Acquisition | |
Company completed its acquisition | 100.00% |
Aggregate purchase consideration | $2,150,000 |
Jussey indirectly owns of Dongguan Kezheng Electronics Limited | 80.00% |
Recovered_Sheet2
Uncertainty Of Ability To Continue As A Going Concern (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Uncertainty Of Ability To Continue As A Going Concern | |
Company has generated revenue | $1,013,241 |
Company has incurred an accumulated deficit | $4,819,559 |