Item 8. Financial Statements
and Supplementary Data.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2017 AND 2016
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the shareholders and the board of directors
of
Sinorama Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of Sinorama Corporation and its subsidiaries (collectively the “Company”) as of December 31, 2017 and
2016, and the related consolidated statements of operations and comprehensive loss, Changes in stockholders’ deficits, and
cash flows for each of the years in the two-years period ended December 31, 2017, and the related notes (collectively referred
to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,
in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations
and its cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles
generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are
the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required
to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are
required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to
assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide
a reasonable basis for our opinion.
Restate of Previously Issued Consolidated
Financial Statements
As discussed in Note 2 to the consolidated
financial statements, the 2016 consolidated financial statements have been restated to correct a misstatement.
/s/ ZH CPA LLP
|
|
|
|
We have served as the Company’s auditor since 2018.
|
|
|
|
Vancouver, Canada
|
|
April 17, 2018
|
|
SINORAMA CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2017 AND 2016
(EXPRESSED IN US DOLLARS)
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
(Restated)
|
|
Assets
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
4,586,833
|
|
|
$
|
6,181,785
|
|
Restricted cash
|
|
|
3,162,969
|
|
|
|
2,371,212
|
|
Short term investment
|
|
|
1,679,560
|
|
|
|
210,148
|
|
Accounts receivable, net
|
|
|
1,566
|
|
|
|
233,361
|
|
Amount due from related parties
|
|
|
9,726,305
|
|
|
|
3,563,858
|
|
Prepayments & deferred expenses
|
|
|
13,728,133
|
|
|
|
9,052,700
|
|
Other receivable
|
|
|
966,308
|
|
|
|
728,887
|
|
Total current assets
|
|
|
33,851,674
|
|
|
|
22,341,951
|
|
|
|
|
|
|
|
|
|
|
Long term deposits
|
|
|
1,555,846
|
|
|
|
2,065,019
|
|
Property and Equipment, net
|
|
|
329,013
|
|
|
|
235,173
|
|
Total assets
|
|
$
|
35,736,533
|
|
|
$
|
24,642,143
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
9,244,983
|
|
|
$
|
4,258,304
|
|
Customer deposits
|
|
|
30,129,523
|
|
|
|
22,772,259
|
|
Payroll payable
|
|
|
164,058
|
|
|
|
123,644
|
|
Amount due to related party
|
|
|
7,576
|
|
|
|
1,435,433
|
|
Total liabilities
|
|
$
|
39,546,140
|
|
|
$
|
28,589,640
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ deficit
|
|
|
|
|
|
|
|
|
Common stock; $0.001 par value, 100,000,000 shares authorized; 15,186,000 and 14,700,000 and issued and outstanding at December 31, 2017 and 2016, respectively
|
|
|
15,186
|
|
|
|
14,700
|
|
Additional paid-in capital
|
|
|
5,211,616
|
|
|
|
4,483,102
|
|
Accumulated Deficits
|
|
|
(5,935,857
|
)
|
|
|
(5,471,480
|
)
|
Accumulated other comprehensive income
|
|
|
391,622
|
|
|
|
395,883
|
|
Total shareholders’ deficits of the Company
|
|
|
(317,433
|
)
|
|
|
(577,795
|
)
|
Non-controlling interests
|
|
|
(3,492,174
|
)
|
|
|
(3,369,702
|
)
|
Total shareholders’ deficits
|
|
|
(3,809,607
|
)
|
|
|
(3,947,497
|
)
|
Total liabilities and shareholders’ deficits
|
|
$
|
35,736,533
|
|
|
$
|
24,642,143
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
SINORAMA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
FOR THE YEAR ENDED DECEMBER 31, 2017 AND
2016
(EXPRESSED IN US DOLLARS, EXCEPT SHARES DATA)
|
|
For The Year Ended
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
(Restated)
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Asian Tours
|
|
|
|
|
|
|
|
|
Related Parties Sales
|
|
$
|
18,902,016
|
|
|
$
|
26,162,613
|
|
Third Parties Sales
|
|
|
56,446,313
|
|
|
|
34,399,972
|
|
Total Asian Tours
|
|
|
75,348,329
|
|
|
|
60,562,585
|
|
Bus Tours
|
|
|
|
|
|
|
|
|
Related Parties Sales
|
|
|
231,621
|
|
|
|
38,007
|
|
Third Parties Sales
|
|
|
13,967,397
|
|
|
|
9,573,886
|
|
Total Bus Tours
|
|
|
14,199,018
|
|
|
|
9,611,893
|
|
Third Party Product Sales
|
|
|
|
|
|
|
|
|
Related Parties Sales
|
|
|
240,529
|
|
|
|
81,574
|
|
Third Parties Sales
|
|
|
8,489,845
|
|
|
|
7,399,995
|
|
Total Third-Party Product Sales
|
|
|
8,730,374
|
|
|
|
7,481,569
|
|
Total revenue
|
|
|
98,277,721
|
|
|
|
77,656,047
|
|
Cost of Sales
|
|
|
84,998,447
|
|
|
|
71,595,860
|
|
Gross Profit
|
|
|
13,279,274
|
|
|
|
6,060,187
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
Salaries and employee benefits
|
|
|
4,665,031
|
|
|
|
3,638,470
|
|
Advertising and promotion
|
|
|
6,426,580
|
|
|
|
5,116,848
|
|
Rent and occupancy charges
|
|
|
326,221
|
|
|
|
291,409
|
|
Office and general
|
|
|
475,181
|
|
|
|
496,179
|
|
Bank charge and interest
|
|
|
1,736,173
|
|
|
|
1,406,860
|
|
Business taxes and licenses
|
|
|
84,137
|
|
|
|
27,210
|
|
Professional fees
|
|
|
265,881
|
|
|
|
435,927
|
|
Depreciation of property and equipment
|
|
|
50,766
|
|
|
|
37,820
|
|
Insurance
|
|
|
49,825
|
|
|
|
32,920
|
|
Other expense
|
|
|
3,719
|
|
|
|
5,497
|
|
Total operating costs and expenses
|
|
|
14,083,514
|
|
|
|
11,489,140
|
|
Losses from operations before other income and income taxes
|
|
|
(804,240
|
)
|
|
|
(5,428,953
|
)
|
Other income(expense)
|
|
|
232,793
|
|
|
|
(211,349
|
)
|
Losses from operations before income taxes
|
|
|
(571,447
|
)
|
|
|
(5,640,302
|
)
|
Income tax
|
|
|
-
|
|
|
|
(56,954
|
)
|
Net loss
|
|
|
(571,447
|
)
|
|
|
(5,583,348
|
)
|
Less: net income(loss) attributable to non-controlling interests
|
|
|
(107,070
|
)
|
|
|
(2,127,862
|
)
|
Net loss attributable to the Company
|
|
$
|
(464,377
|
)
|
|
$
|
(3,455,486
|
)
|
Other comprehensive income(loss):
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
(19,663
|
)
|
|
|
259,802
|
|
Foreign currency translation adjustments attributable to non-controlling interests
|
|
|
(15,402
|
)
|
|
|
118,128
|
|
Foreign currency translation adjustments attributable to the Company
|
|
|
(4,261
|
)
|
|
|
141,674
|
|
Comprehensive loss
|
|
$
|
(591,110
|
)
|
|
$
|
(5,323,546
|
)
|
Less: Comprehensive income(loss) attributable to non-controlling interests
|
|
|
(122,472
|
)
|
|
|
(2,009,734
|
)
|
Comprehensive income(loss) attributable to the Company
|
|
$
|
(468,638
|
)
|
|
$
|
(3,313,812
|
)
|
Basic and diluted earnings per share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.29
|
)
|
Weighted average number of shares outstanding basic and diluted
|
|
|
15,054,639
|
|
|
|
11,786,889
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
SINORAMA CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’
DEFICITS
FOR THE YEAR ENDED DECEMBER 31, 2017 AND
2016
(EXPRESSED IN US DOLLARS, EXCEPT SHARES DATA)
|
|
Common Stock
|
|
|
Additional
paid-in
|
|
|
Accumulated
|
|
|
Accumulated
Other
comprehensive
|
|
|
Non-
Controlling
|
|
|
Total
Shareholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
capital
|
|
|
Deficits
|
|
|
income
|
|
|
Interest
|
|
|
deficit
|
|
Balance at January 1, 2015
|
|
|
11,000,000
|
|
|
$
|
11,000
|
|
|
$
|
786,802
|
|
|
$
|
(2,015,994
|
)
|
|
$
|
254,209
|
|
|
$
|
(1,359,968
|
)
|
|
$
|
(2,323,951
|
)
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,455,486
|
)
|
|
|
|
|
|
|
(2,127,862
|
)
|
|
|
(5,583,348
|
)
|
June 3, 2015 Shares issued
|
|
|
3,700,000
|
|
|
|
3,700
|
|
|
|
3,696,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,700,000
|
|
Foreign currency translation adjustments (Restate)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141,674
|
|
|
|
118,128
|
|
|
|
259,802
|
|
Balance at December 31, 2016 (Restated)
|
|
|
14,700,000
|
|
|
$
|
14,700
|
|
|
$
|
4,483,102
|
|
|
$
|
(5,471,480
|
)
|
|
$
|
395,883
|
|
|
$
|
(3,369,702
|
)
|
|
$
|
(3,947,497
|
)
|
Net income(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(464,377
|
)
|
|
|
|
|
|
|
(107,070
|
)
|
|
|
(571,447
|
)
|
Shares issued
|
|
|
486,000
|
|
|
|
486
|
|
|
|
728,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
729,000
|
|
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,261
|
)
|
|
|
(15,402
|
)
|
|
|
(19,663
|
)
|
Balance at December 31, 2017
|
|
|
15,186,000
|
|
|
$
|
15,186
|
|
|
$
|
5,211,616
|
|
|
$
|
(5,935,857
|
)
|
|
$
|
391,622
|
|
|
$
|
(3,492,174
|
)
|
|
$
|
(3,809,607
|
)
|
The accompanying notes are an integral part
of these consolidated financial statements.
SINORAMA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2017 AND
2016
(EXPRESSED IN US DOLLARS)
|
|
For the Year Ended
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
(Restated)
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(571,447
|
)
|
|
$
|
(5,583,348
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
50,766
|
|
|
|
37,820
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
239,993
|
|
|
|
(176,341
|
)
|
Prepayments & deferred expenses
|
|
|
(2,931,704
|
)
|
|
|
548,169
|
|
Other receivable
|
|
|
(167,555
|
)
|
|
|
(578,935
|
)
|
Due from related parties
|
|
|
(5,455,032
|
)
|
|
|
(2,937,544
|
)
|
Accounts payable and accrued liabilities
|
|
|
4,017,331
|
|
|
|
3,270,992
|
|
Customer deposits
|
|
|
5,446,900
|
|
|
|
9,351,963
|
|
Payroll Payable
|
|
|
25,497
|
|
|
|
4,471
|
|
Income taxes payable
|
|
|
-
|
|
|
|
(2
|
)
|
Other payable
|
|
|
-
|
|
|
|
(15,100
|
)
|
Due to related parties
|
|
|
(2,208,847
|
)
|
|
|
(5,497,957
|
)
|
Net cash used in operating activities
|
|
|
(1,554,098
|
)
|
|
|
(1,575,812
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
Short term investment
|
|
|
(1,391,143
|
)
|
|
|
716,182
|
|
Purchases of property and equipment
|
|
|
(125,189
|
)
|
|
|
(120,042
|
)
|
Net cash provided by (used in) investing activities
|
|
|
(1,516,332
|
)
|
|
|
596,140
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
Issue common stock
|
|
|
729,000
|
|
|
|
3,700,000
|
|
Net cash provided by financing activities
|
|
|
729,000
|
|
|
|
3,700,000
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate fluctuation on cash and cash equivalents
|
|
|
1,538,235
|
|
|
|
6,539
|
|
Net increase(decrease) in cash and cash equivalents
|
|
|
(803,195
|
)
|
|
|
2,726,867
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
8,552,997
|
|
|
|
5,826,130
|
|
Cash and cash equivalents, ending of year
|
|
$
|
7,749,802
|
|
|
$
|
8,552,997
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
|
Cash paid for income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
Cash paid for interest
|
|
|
-
|
|
|
|
-
|
|
The accompanying notes are an integral part
of these consolidated financial statements.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Sinorama Corporation (the “Company”
or “Sinorama”) was incorporated on June 30, 2016, under the laws of the State of Florida. On the same date, Sinorama
issued 11,000,000 shares of its common stock in exchange for all of the outstanding shares of Sinorama Tours Co., Ltd., a Samoan
corporation organized in June 2015 ("Sinorama Tours"). Sinorama Tours is a holding company with two operating subsidiaries:
|
·
|
Vacances
Sinorama Inc. (“Vacances Sinorama”), an integrated tour company incorporated in Quebec, Canada in December 2004. Vacances
Sinorama provides Bus Tours, Asian Tours, Airline Tickets, Hotel Reservations, Cruises and other travel services to its customers
worldwide. Vacances Sinorama facilitates travel commerce with online and offline travel businesses. Vacances Sinorama is servicing
both business to customer (B2C) and business to business (“B2B”) in the travel marketplace.
|
|
·
|
Sinorama
Voyages (“Sinorama Voyages”), an integrated tour company incorporated in France in February 2012. Sinorama Voyages
also provides Bus Tours, Asian Tours, Airline Tickets and other travel services to its customers worldwide. Sinorama Voyages facilitates
travel commerce with online and offline travel businesses. Sinorama Voyages services both business to customer (B2C) and business
to business (“B2B”) in the travel marketplace.
|
Sinorama Tours owns 66⅔% of Vacances
Sinorama through Simon Qian Voyages, Inc., a wholly-owned subsidiary, and owns 51% of Sinorama Voyages directly. The other 33⅓%
of Vacances Sinorama is owned by Qian Hong, the Chairman of Sinorama. The other 49% of Sinorama Voyages is owned by Yang Ming (39%)
and Zhao Hongxi (10%). Zhao Hongxi is the Chief Financial Officer of Sinorama.
Reorganization on June 30, 2016
The control of the entities was not changed
by the acquisition on June 30, 2016, as all of the entities remained under the control of Qian Hong and his wife, Jing Wenjia.
Accordingly, we have treated the combination, for accounting purposes, as a corporate restructuring (reorganization) of entities
under common control, and thus the current capital structure has been retroactively presented in prior periods as if such structure
existed at that time and in accordance with ASC 805-50-45-5, the entities under common control are presented on a combined basis
for all periods to which such entities were under common control. Since all of the subsidiaries were under common control for the
entirely of the years ended December 31, 2017 and 2016, the results of these subsidiaries are included in the financial statements
for both periods. Non-controlling interests in the subsidiaries are related parties and thus were not adjusted to fair value as
a result of the reorganization.
Basis of presentation
The accompanying financial data have been prepared
by us pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and are presented in conformity
with U.S. generally accepted accounting principles (U.S. GAAP). Our fiscal year end is December 31. Unless otherwise stated, all
years and dates refer to our fiscal year.
.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
(Continued)
Principles of consolidation
The consolidated financial statements include
the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated in consolidation.
Non-controlling interests represent the equity interest in Vacances Sinorama and Sinorama Voyages that are not attributable to
the Company. Non-controlling interest is reported in the consolidated financial position within equity, separately from the Company’s
equity, and net income or loss and comprehensive income or loss that are attributable to the Company and to the non-controlling
interest are separately reported on the Statement of Operations.
Note 2 – RESTATEMENT OF PREVIOUSLY ISSUED
CONSOLIDATED FINANCIAL STATEMENT
During the preparation of our Annual Report
on Form 10-K for the fiscal year of 2017, the Company has discovered errors in cost and expense cutoff procedures, which resulted
in misstatements in our previously issued consolidated financial statements for the year ended December 31, 2016. The consolidated
financial statements for the year ended December 31,2016 have been restated to reflect the correction of the misstatements. The
Company has also corrected certain disclosures related to the consolidated financial statements. The Company’s management
discussed the circumstances surrounding the misstatements with the Board of Directors. In connection with the accounting review,
the Company identified material weaknesses in its internal control over financial reporting, described in further detail in Item
9A, “Controls and Procedures,” contained in this Annual Report on Form 10-K. As a result of these misstatements, the
Company has restated its consolidated financial statements in accordance with ASC 250,
Accounting Changes and Error Corrections
(the “restated consolidated financial statements”).
The impact of these restatements on the consolidated
financial statements as previously reported is summarized below:
|
|
As of December 31, 2016
|
|
|
|
As previously reported
|
|
|
Adjustment
|
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
|
Prepayments & deferred expenses
|
|
$
|
9,234,410
|
|
|
|
(181,710
|
)
|
|
$
|
9,052,700
|
|
Total current assets
|
|
|
22,523,661
|
|
|
|
(181,710
|
)
|
|
|
22,341,951
|
|
Total assets
|
|
|
24,823,853
|
|
|
|
(181,710
|
)
|
|
|
24,642,143
|
|
Accounts payable and accrued liabilities
|
|
|
3,373,444
|
|
|
|
884,860
|
|
|
|
4,258,304
|
|
Total current liabilities
|
|
|
27,704,780
|
|
|
|
884,860
|
|
|
|
28,589,640
|
|
Total liabilities
|
|
|
27,704,780
|
|
|
|
884,860
|
|
|
|
28,589,640
|
|
Retained earnings
|
|
|
(4,750,659
|
)
|
|
|
(720,821
|
)
|
|
|
(5,471,480
|
)
|
Accumulated other comprehensive income
|
|
|
387,917
|
|
|
|
7,966
|
|
|
|
395,883
|
|
Non-controlling interest
|
|
|
(3,015,987
|
)
|
|
|
(353,715
|
)
|
|
|
(3,369,702
|
)
|
Total shareholders’ deficit
|
|
$
|
(2,880,927
|
)
|
|
|
(1,066,570
|
)
|
|
$
|
(3,947,497
|
)
|
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
Note 2 – RESTATEMENT OF PREVIOUSLY ISSUED
CONSOLIDATED FINANCIAL STATEMENT (continued)
|
|
For the year ended December 31, 2016
|
|
|
|
As previously reported
|
|
|
Restated
|
|
Cost of Sales
|
|
$
|
70,864,211
|
|
|
$
|
731,649
|
|
|
$
|
71,595,860
|
|
Gross Profit
|
|
|
6,791,836
|
|
|
|
(731,649
|
)
|
|
|
6,060,187
|
|
Advertising and promotion
|
|
|
4,767,320
|
|
|
|
349,528
|
|
|
|
5,116,848
|
|
Total operating costs and expenses
|
|
|
11,139,612
|
|
|
|
349,528
|
|
|
|
11,489,140
|
|
Losses from operations before other income and income taxes
|
|
|
(4,347,776
|
)
|
|
|
(1,081,177
|
)
|
|
|
(5,428,953
|
)
|
Losses from operations before income taxes
|
|
|
(4,559,125
|
)
|
|
|
(1,081,177
|
)
|
|
|
(5,640,302
|
)
|
Net loss
|
|
|
(4,502,171
|
)
|
|
|
(1,081,177
|
)
|
|
|
(5,583,348
|
)
|
Less: net loss attributable to non-controlling interests
|
|
|
(1,767,506
|
)
|
|
|
(360,356
|
)
|
|
|
(2,127,862
|
)
|
Net loss attributable to the Company
|
|
|
(2,734,665
|
)
|
|
|
(720,821
|
)
|
|
|
(3,455,486
|
)
|
Foreign currency translation adjustment
|
|
|
245,195
|
|
|
|
14,607
|
|
|
|
259,802
|
|
Foreign currency translation adjustment attributable to non-controlling interests
|
|
|
111,487
|
|
|
|
6,641
|
|
|
|
118,128
|
|
Foreign currency translation adjustment attributable to the Company
|
|
|
133,708
|
|
|
|
7,966
|
|
|
|
141,674
|
|
Total comprehensive income
|
|
$
|
(4,256,976
|
)
|
|
$
|
(1,066,570
|
)
|
|
$
|
(5,323,546
|
)
|
Less: Comprehensive loss attributable to non-controlling interests
|
|
|
(1,656,019
|
)
|
|
|
(353,715
|
)
|
|
|
(2,009,734
|
)
|
Comprehensive income(loss) attributable to the Company
|
|
|
(2,600,957
|
)
|
|
|
(712,855
|
)
|
|
|
(3,313,812
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share
|
|
|
(2,734,665
|
)
|
|
|
(720,821
|
)
|
|
|
(3,455,486
|
)
|
Basic
|
|
$
|
(0.23
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.29
|
)
|
Diluted
|
|
$
|
(0.23
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.29
|
)
|
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of estimates
The preparation of audited consolidated financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the
reported amounts of revenue and expenses during the reporting periods. Management makes these estimates using the best information
available at the time the estimates are made; however actual results could differ from those estimates. Significant items subject
to such estimates and assumptions include valuation allowances for receivables and recoverability of carrying amount and the estimated
useful lives of long-lived assets. These estimates are often based on complex judgments and assumptions that management believes
to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.
Reclassification
The comparative figures have been reclassified
to conform to current year presentation.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 3. SUMMARIES OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Revenue recognition
The Company's revenues are primarily derived
from sale of our self-developed products, including Bus Tour Products and Asian Tour Products. The Company also sells Third Party
Products (airline tickets, hotels, etc.). Revenue is recognized only when persuasive evidence of an arrangement exists, the service
has been performed, the price is fixed or determinable, and the collectability of the related fee is reasonably assured, in accordance
with ASC 605,
Revenue Recognition
, ("ASC 605"). Specifically, contracts are signed to establish significant
terms such as the price and specific services to be provided. The Company assesses the creditworthiness of our customers prior
to signing the contracts to ensure collectability is reasonably assured. Non-refundable payments received before all of the relevant
criteria for revenue recognition are satisfied are recorded as customer advances and deposits.
Bus Tour Products Sales
Revenues from Bus Tours are recognized when
customers depart from the trips. Revenues from Bus Tour services are recognized on a gross basis, which represent amounts charged
to and received from customers. The Company is the primary obligor in the arrangement and bear the risks and rewards, including
the customers’ acceptance of products and services delivered.
Asian Tour Products Sales
The Company recognize Asian Tour services revenues
and other travel-related services such as visa processing services on the date that the tours or the flights depart, provided that
evidence of an arrangement exists, the fees are fixed and determinable, no significant obligations remain at the end of the period,
and collection of the resulting receivable is reasonably assured. We require that full payment be made before flights depart.
Revenues from Asian Tour services are recognized
on a gross basis, which represent amounts charged to and received from customers. The Company is the primary obligor in the arrangement
and bear the risks and rewards, including the customers’ acceptance of products and services delivered.
Third Party Products Sales
Revenue from sales of the Third-Party Products
reservations is recognized at the time of the booking of the reservation. Third-Party Products sales are non-refundable. Third-Party
Products revenue is normally derived from airline tickets, hotel reservations, cruises, insurance, etc. The revenue from Third
Party Products is recognized on a gross basis. The Company conducts a rigorous process in selecting travel products and services
before selling these products to customers and independently determines the prices charged to customers for Third Party Products.
The Company is the primary obligor in the arrangement and is responsible for the ultimate customer acceptance for all products
and services rendered. Such commitment is also made in the contracts entered into with customers. The Company is the party retained
and paid by customers. In situations of customer disputes, where the customer files a complaint or demands a refund, the Company
assumes risks and responsibilities for the delivery of products and is responsible for refunding the customers their payments.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 3. SUMMARIES OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Cash and cash equivalents
Cash and cash equivalents consist of cash on
hand and bank deposits and other liquid investments, which are unrestricted as to withdrawal and use. All highly liquid investments
with original stated maturity of three months or less are classified as cash equivalents. Cash and cash equivalents approximates
or equals fair value due to their short term nature. The Group’s cash and cash equivalents consist of cash on hand and cash
in bank, including bank term deposits. As of December 31, 2017 and 2016, the cash on hand and cash in bank were $3,895,910 and
$5,126,409, respectively. As of December 31, 2017 and 2016, the term deposits for IATA were $90,896 and $nil, respectively, the
interest rate was between 0.95%, maturity was three months or less. As of December 31, 2017 and 2016, the short term deposits were
$600,027 and $1,055,376, respectively, the interest rate was 0.2% to 0.50%, maturity was three months or less. Therefore, the total
cash and cash equivalents, as of December 31, 2017 and 2016, were $4,586,833 and $6,181,785, respectively.
Restricted cash
In accordance with the Quebec Consumer Protection
Act and the Travel Agents Act, the Company is required to deposit into trust certain customer deposits until suppliers are paid
for their services. The company can access the trust account only to administer it as trustee, cannot use funds from this account
for personal or corporate purposes until the supplier is paid. As of December 31, 2017 and 2016, the restricted cash in the trust
account was $3,162,969 and $2,371,212, respectively.
Short term investments
Short-term investments are comprised of
investments in financial products issued by banks or other financial institutions, which contain a fixed or variable interest
rate and a term to maturity of greater than 3 months but less than 12 months. Such investments are generally not permitted to
be redeemed early or are subject to non interest for redemption prior to maturity. The Company classifies these investments
as held-to-maturity as it has both the positive intent and ability to hold them until maturity. These investments are
classified as short-term investments based on the maturity date. The short term investments maturities are exceeding three
months. As of December 31, 2017 and 2016, the short term investments were $1,679,560 and $210,148, respectively, the interest
rates were between 0.65% to 1.5%, and the maturity was exceeding three months but less than twelve months.
Fair Value Measurement
The Company applies the provisions of ASC Subtopic
820-10, Fair Value Measurements, for fair value measurements of financial assets and financial liabilities and for fair value measurements
of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework
for measuring fair value and expands disclosures about fair value measurements.
Fair value is defined as the price that would
be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. In determining the fair value for the assets and liabilities required or permitted to be recorded, the Company
considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants
would use when pricing the asset or liability.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 3. SUMMARIES OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Fair Value Measurement (continued)
ASC 820 establishes a fair value hierarchy
that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority
to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy
are as follows:
Level 1: Unadjusted quoted prices
in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2: Quoted prices in markets
that are not active, or inputs that is observable, either directly or indirectly, for substantially the full term of the asset
or liability;
Level 3: Prices or valuation techniques
that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market
activity).
There were no transfers between level 1, level
2 or level 3 measurements for the years ended December 31, 2017 and 2016.
Financial assets and liabilities of the Company
primarily comprise of cash and cash equivalents, restricted cash, Short term investment, accounts receivable, amount due from related
parties, other receivable, accounts payable, payroll payable, amount due to related party and other payable.
As at December 31, 2017 and 2016, the carrying values of these financial instruments approximated to their fair values due to the
short-term maturity of these instruments.
Accounts receivable
Accounts receivable are recognized and carried
at original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtful debts is made when
the collection of the full amount is no longer probable. Bad debts are written off as incurred.
The Company maintains allowances for doubtful
accounts for estimated losses resulting from the failure of customers to make payments on time. The Company reviews the accounts
receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating
the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the
customer’s historical payment history, its current credit-worthiness and current economic trends.
The Company experienced nil and nil bad debts
during the year ended December 31, 2017 and 2016, respectively.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 3. SUMMARIES OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Property and equipment
Property and equipment are stated at cost.
Computer Equipment, Furniture & Fixtures and Office Equipment are depreciated using the declining balance depreciation method
basis reflective of the useful lives of the assets. Leasehold Improvement are stated at cost and are depreciated using the straight-line
method over the shorter of the estimated useful lives of the asset or the term of the related lease, as follows:
Computer Equipment
|
|
Declining Balance Method at rate 30% per year
|
Furniture & Fixtures
|
|
Declining Balance Method at rate 20% per year
|
Office Equipment
|
|
Declining Balance Method at rate 20% per year
|
Leasehold Improvement
|
|
10 years
|
Repair and maintenance costs are charged to
expenses as incurred, whereas the cost of renewals and betterment that extends the useful lives of property and equipment is capitalized
as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated
depreciation from the assets and accumulated depreciation accounts with any resulting gain or loss reflected in the statements
of operations and comprehensive loss.
Functional currency and foreign currency
translation
As of and for the years ended December 31,
2017 and 2016, all foreign subsidiaries use the local currency of their respective countries as their functional currency, which
is the U.S. Dollars for Sinorama and Sinorama Tours, and the Canadian dollar (“Canada dollar”) for Simon Qian Voyages
and Vacances Sinorama and the Euro (“€”) for Sinorama Voyages.
The Company’s reporting currency is U.S.
dollars. Assets and liabilities of Simon Qian Voyages, Vacances Sinorama and Sinorama Voyages are translated into U.S. dollars
at the exchange rates set forth in the Bank of Canada at the balance sheet dates, revenues and expenses are translated into U.S.
dollars at average exchange rates set forth in the Bank of Canada for the reporting periods, and shareholders' equity is translated
at historical exchange rates. Gains and losses resulting from translation are recorded as a component of accumulated other comprehensive
income (loss).
Realized gains and losses from foreign currency
transactions are recognized as gain or loss on foreign currency in the consolidated statements of operations, unrealized gains
and losses from foreign currency transactions are recognized as other comprehensive income in the consolidated statements of operations.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 3. SUMMARIES OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Functional currency and foreign currency
translation (continued)
The exchange rates used for foreign currency translation
are as follows:
|
|
|
|
2017
|
|
2016
|
|
|
|
|
(CAD to USD/EUR to USD)
|
|
(CAD to USD/EUR to USD)
|
Assets and liabilities
|
|
period end exchange rate
|
|
0.7971/1.1998
|
|
0.7448/1.0553
|
Revenue and expenses
|
|
period weighted average
|
|
0.7708/1.1292
|
|
0.7550/1.1068
|
Income taxes
The Company adopts FASB ASC Topic 740, “Income
Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of
events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized
for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting
amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences
are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized.
In July 2006, the FASB issued FIN 48(ASC 740-10),
Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109 (ASC 740), which requires income tax positions
to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Under FIN 48(ASC 740-10), tax
positions that previously failed to meet the more-likely-than-not threshold should be recognized in the first subsequent financial
reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not
threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met.
The application of tax laws and regulations
is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change
as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the
actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities
or potentially reverse previously recorded tax liabilities or deferred tax asset valuation allowance.
The Company income tax expenses (recovery)
was $nil and (56,954) for the years ended December 31, 2017 and 2016, respectively.
Earnings per share
The Company computes earnings per share (“EPS”)
in accordance with ASC 260, Earnings Per Share. ASC 260 requires companies with complex capital structures to present basic and
diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding during the period.
Diluted EPS is similar to basic EPS but presents
the dilutive effect on a per share basis of contracts to issue ordinary common shares (e.g., convertible securities, options and
warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. The computation
of diluted EPS includes the estimated impact of the exercise of contracts to purchase common stocks using the treasury stock method
and the potential shares of converted common stock associated with the convertible debt using the if-converted method. Potential
common shares that have an anti-dilutive effect (i.e., those that increase earnings per share or decrease loss per share) are excluded
from the calculation of diluted EPS.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 3. SUMMARIES OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Comprehensive Income (Loss)
Comprehensive income (loss) is comprised of
net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains or losses
resulting from translating Simon Qian Voyages, Vacances Sinorama and Sinorama Voyages’ functional currency, the Canadian
dollar and the Euro, to its reporting currency, U.S. dollar.
Segment Information and Geographic Data
The Company reports segment information based
on the “management” approach. The management approach designates the internal reporting used by management for making
decisions and assessing performance as the source of the Company’s reportable operating segments.
The Company manages its business primarily
on a geographic basis. The Company’s reportable operating segments consist of the Vacances Sinorama (Canada) and Sinorama
Voyages (France). Although each reportable operating segment provides similar travel products and similar services, they are managed
separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics
of each geographic region. The accounting policies of the various segments are the same as those described in Note 2, “Summary
of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in this report.
The Company evaluates the performance of its
reportable operating segments based on net sales and operating income. Net sales for geographic segments are generally based on
the location of customers and sales through the Company’s office located in those geographic locations. Operating income
for each segment includes net sales to third parties, related cost of sales and operating expenses directly attributable to the
segment. Advertising expenses and salaries and employee benefits are generally included in the geographic segment in which the
expenditures are incurred. Operating income for each segment excludes other income and expense and certain expenses managed outside
the reportable operating segments. Costs excluded from segment operating income include income taxes and foreign currency translation
adjustment. The Company does not include intercompany transfers between segments for management reporting purposes.
Summarized financial information by segment
is as follows:
|
|
Vacances
Sinorama
(Canada)
|
|
|
Sinorama
Voyages
(France)
|
|
|
Sinorama
Corporation
(USA)
|
|
|
Total
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
88,069,248
|
|
|
|
10,208,473
|
|
|
|
|
|
|
|
98,277,721
|
|
Operating income (losses)
|
|
|
695,220
|
|
|
|
(784,803
|
)
|
|
|
(481,864
|
)
|
|
|
(571,447
|
)
|
Total assets
|
|
|
27,753,926
|
|
|
|
4,001,860
|
|
|
|
3,980,747
|
|
|
|
35,736,533
|
|
December 31, 2016 (Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
63,326,273
|
|
|
|
14,329,774
|
|
|
|
-
|
|
|
|
77,656,047
|
|
Operating income (losses)
|
|
|
(2,992,176
|
)
|
|
|
(2,341,294
|
)
|
|
|
(306,832
|
)
|
|
|
(5,640,302
|
)
|
Total assets
|
|
|
17,535,049
|
|
|
|
3,646,925
|
|
|
|
3,460,169
|
|
|
|
24,642,143
|
|
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 3. SUMMARIES OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Segment Information and Geographic Data
(continued)
A reconciliation of the Company’s segment
operating income to the Consolidated Statements of Operations for the year ended December 31, 2017 and December 31, 2016:
|
|
The Year Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
(Restated)
|
|
Segment operating loss
|
|
$
|
(571,447
|
)
|
|
$
|
(5,640,302
|
)
|
Income tax expense
|
|
|
-
|
|
|
|
56,954
|
|
Foreign currency translation adjustments
|
|
|
(19,663
|
)
|
|
|
259,802
|
|
Total Comprehensive loss
|
|
$
|
(591,110
|
)
|
|
$
|
(5,323,546
|
)
|
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk are cash and cash equivalents, restricted cash, Short term investment, accounts receivable,
amount due from related parties, other receivables, Long term deposits and arising from its normal business activities. The carrying
amounts of these financial instruments represent the maximum amount of loss due to credit risk. The deposits placed with financial
institutions are not protected by statutory or commercial insurance. In the event of bankruptcy of one of these financial institutions,
the Company may be unlikely to claim its deposits back in full. Management believes that these financial institutions are of high
credit quality and continually monitors the credit worthiness of these financial institutions. The Company places its cash in what
it believes to be credit-worthy financial institutions. The Company has a diversified customer base. The majority of sales are
cash receipt in advance. For those credit sales, the Company routinely assesses the financial strength of its customers and, based
upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence,
believes that its accounts receivable credit risk exposure beyond such allowance is limited.
Exchange
Rate Risks
The
Company operates in Canada and France, which may give rise to significant foreign currency risks from fluctuations and the degree
of volatility of foreign exchange rates between the US$ and the CAD, Euro. In 2017, foreign exchange gain (losses) of $(86,674)
is included in Operating costs and expenses (2016 - $1,167,624). As at December 31, 2017, cash and cash equivalents of $3,068,275
(CAD3,849,298) is denominated in CAD and are held in Canada (December 31, 2016 - $2,111,443 (CAD2,834,912), cash and cash equivalent
of $1,456,257 (Euro1,213,749) is denominated in Euro and are held in France (December 31, 2016 - $ 2,297,734 (Euro2,177,313).
Recently accounting pronouncements
In January 2016, the FASB issued ASU 2016-01
Financial Instruments Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Liabilities. ASU 2016-01 amends
the guidance in US GAAP on classification, measurement and disclosure of financial instruments. It revises an entity’s accounting
related to: 1) classification and measurement of investments in equity securities; 2) presentation of certain fair value changes
for financial liabilities measured at fair value; and, 3) amends disclosure requirements associated with the fair value of financial
instruments. ASU 2016-01 is effective for years beginning after December 15, 2017 and early adoption is permitted. The adoption
of ASU 2016-01 is not expected to have a material effect on the Company's consolidated financial statements.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 3. SUMMARIES OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Recently accounting pronouncements (continued)
In February 2016, the FASB issued ASU 2016-02
Leases (Topic 842). ASU 2016-02 establishes new guidance for the recording and disclosure of assets and liabilities that arise
from leasing activity. ASU 2016-02 will require most lessees to record lease assets and lease liabilities that arise from leases
on the statement of financial condition and disclose qualitative and quantitative information related to lease transactions such
as variable lease payments and options to renew and terminate leases. ASU 2016-02 is effective for years beginning after December
18, 2018 and early adoption is permitted. The Company is evaluating ASU 2016-02 to determine its impact, if any, on the consolidated
financial statements.
In October 2016, the FASB issued Accounting
Standards Update No. 2016-16, Income Taxes – Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). The standard
is intended to address diversity in practice and complexity in financial reporting, particularly for intra-entity transfers of
intellectual property. ASU 2016-16 will be effective for the Company beginning with the interim periods of fiscal 2018 and requires
the modified retrospective method of adoption. Early adoption is permitted. The Company is in the process of determining timing
of adoption and assessing the impact of ASU 2016-16 on its consolidated financial statements.
In January 2017, the FASB issued Accounting
Standards Board Update No. 2017-01: Business Combinations (Topic 805) - Clarifying the Definition of a Business (“ASU
2017-01”). The ASU clarifies the definition of business with the objective of adding guidance to assist entities with evaluating
whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 will be effective
for the Company’s fiscal year beginning January 1, 2018 and subsequent interim periods with prospective application with
impacts on the Company’s consolidated financial statements that may vary depending on each specific acquisition. Early adoption
is conditionally permitted.
In March 2017, the FASB issued ASU No. 2017-08,
Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities.
Under current GAAP, entities normally amortize the premium as an adjustment of yield over the contractual life of the instrument.
This guidance shortens the amortization period for certain callable debt securities held at a premium to the earliest call date.
This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The
adoption of ASU No. 2017-08 is not expected to have a material impact on the Company’s consolidated financial statements.
As of the date of filing of this report, except
for the above, there are no recently issued accounting standards not yet adopted that would have a material effect on the Company’s
financial statements.
In March 2016, the FASB issued ASU No. 2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).
The amendment in this update affect entities with transactions included within the scope of Topic 606, The scope of that Topic
includes entities that enter into contracts with customers to transfer goods or services (that are an output of the entity’s
ordinary activities) in exchange for consideration. The amendments are intended to improve the operability and understandability
of the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU No. 2016-10, the amendments
in ASU 2016-10 provide more detailed guidance, including additional implementation guidance and examples in the following key areas:
1) identifying performance obligations and 2) licenses of intellectual property. In May 2016, the FASB issued ASU No. 2016-12 a
proposed Update, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The amendments
do not change the core principles of the standard, but clarify the guidance on assessing collectability, presenting sales taxes,
measuring noncash consideration and certain transition matters. This update becomes effective concurrently with ASU No. 2014-09.
The Company adopted ASU 2016-12 effective January 1, 2018. The impact on our consolidated financial statements and related disclosures
was not material.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 3. SUMMARIES OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Recently accounting pronouncements (continued)
In November 2016, the FASB issued ASU No. 2016-18,
Statement of Cash Flows (Topic 230): Restricted Cash (“ASU No. 2016-18”). ASU No. 2016-18 requires that a statement
of cash flows explain the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash
equivalents. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling
the beginning of period and end of period total amounts shown on the statement of cash flows. ASU No. 2016-18 is effective for
annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company elected to early
adopt ASU No. 2016-18 for the reporting period ending December 31, 2017. As a result of adoption of ASU No. 2016-18, the Company
no longer presents the changes within restricted cash in the consolidated statements of cash flows.
NOTE 4. PREPAYMENTS & DEFERRED EXPENSES
Our travel suppliers require prepayments for
reserving tour availabilities. The prepayment is record in prepayments and deferred expenses on the consolidated balance sheets.
Deferred expenses include prepaid insurance, advertising fee. The Company prepayments and deferred expenses for reserving tour
availabilities were $13,728,133 and $9, 052,700 for the years ended December 31, 2017 and 2016, respectively.
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
(Restated)
|
|
Prepayments for tour products
|
|
$
|
13,718,946
|
|
|
$
|
9,001,404
|
|
Prepaid expense
|
|
|
9,187
|
|
|
|
51,296
|
|
Total Prepayments and deferred expenses
|
|
$
|
13,728,133
|
|
|
$
|
9,052,700
|
|
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 5. OTHER RECEIVABLE
At December 31, 2017 and 2016, other receivable
consists of the following:
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
Tax on Value Added (TVA) (France)
|
|
$
|
246,522
|
|
|
$
|
245,621
|
|
GST/QST (Canada)
|
|
|
393,857
|
|
|
|
-
|
|
Income tax receivable (Canada)
|
|
|
69,769
|
|
|
|
376,611
|
|
Air Canada
|
|
|
46,812
|
|
|
|
43,740
|
|
Eva Airway Cor.
|
|
|
15,942
|
|
|
|
-
|
|
China Eastern Airlines
|
|
|
69,200
|
|
|
|
4,000
|
|
United Airline
|
|
|
1,734
|
|
|
|
4,438
|
|
Air China Ltd
|
|
|
23,913
|
|
|
|
22,265
|
|
JL Travel Marketing
|
|
|
12,275
|
|
|
|
11,470
|
|
Others
|
|
|
86,284
|
|
|
|
20,742
|
|
Total other receivable
|
|
$
|
966,308
|
|
|
$
|
728,887
|
|
The amount from Air Canada, Eva Airway Cor, China
Eastern Airlines, United, Air China Ltd, JL Travel Marketing and others is pre-authorization holds for air tickets.
NOTE 6. LONG TERM DEPOSITS
Long term deposits are the deposits made by
the Company held at third institutions for operation purposes. As of December 31, 2017 and December 31, 2016, the Company has $1,199,800
and $1,055,307, respectively, in air ticket security deposit with CAGEP SARL, which is a member of the International Air Transport
Association (IATA) and has the license to sale the air ticket to Sinorama Voyages. As of December 31, 2017 and 2016, the Company
has $nil and $738,555 in security deposits with JP Morgan Chase, which is the security deposit for credit card usage and does not
bear any interest. As of December 31, 2017 and 2016, the Company has $179,348 and $167,580 in deposit with OPC (Office of
Consumer Protection) as travel company bankruptcy guarantee. The deposit does not bear any interest.
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
CAGEP SARL
|
|
$
|
1,199,800
|
|
|
$
|
1,055,307
|
|
JP Morgan Chase
|
|
|
-
|
|
|
|
738,555
|
|
OPC
|
|
|
179,348
|
|
|
|
167,580
|
|
Swatow Development Inc.
|
|
|
95,618
|
|
|
|
74,150
|
|
Other deposit
|
|
|
81,080
|
|
|
|
29,427
|
|
Total Long term deposits
|
|
$
|
1,555,846
|
|
|
$
|
2,065,019
|
|
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 7. PROPERTY AND EQUIPMENT
At December 31, 2017 and 2016, property and equipment,
at cost, consist of:
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
Computer equipment
|
|
$
|
119,797
|
|
|
$
|
19,419
|
|
Furniture & Fixture
|
|
|
21,106
|
|
|
|
5,688
|
|
Office equipment
|
|
|
94,229
|
|
|
|
80,059
|
|
Leasehold Improvement
|
|
|
395,942
|
|
|
|
362,880
|
|
Total property and equipment at cost
|
|
|
631,074
|
|
|
|
468,046
|
|
Accumulated depreciation
|
|
|
302,061
|
|
|
|
232,873
|
|
Total property and equipment, net
|
|
$
|
329,013
|
|
|
$
|
235,173
|
|
Depreciation expense was $50,766 and $37,820 for
the years ended December 31, 2017 and 2016, respectively.
NOTE 8. CUSTOMER DEPOSITS
Customer deposits are the deposits made by
all customers for reservation or the full payment must be paid by either check, debit card, credit card or cash before it can be
confirmed. Customers must settle the total of all sums (due three months before departure). Otherwise, The Company reserves the
right to cancel the reservation and retain the full amount of the initial deposit. Cancellation of a reservation can only be made
through the Company as the following conditions will apply: more than 90 days prior to the departure date: 50% refund of the balance
per-person, including taxes and service charge. If its marked “Final Sale”, which is non-refundable, nor changeable,
nor transferable, whenever the purchase is made. Customer deposits are recognized as revenue on departure date, when services are
provided to the customers. Customer deposits from all customers were $30,129,523 and $22,772,259 at December 31, 2017 and 2016,
respectively, and were recorded as a current liability in the consolidated balance sheets.
NOTE 9. NON-CONTROLLING INTERESTS
Vacances Sinorama Inc. and Sinorama Voyages
are the Company’s majority-owned subsidiary which is consolidated in the Company’s financial statements with a non-controlling
interest recognized.
The 33.33% of Vacances Sinorama interest held
by QIAN Hong is a non-controlling interest. ASC810-10-45 provides that the ownership interest in the subsidiary that are held by
owners other than the parent is a non-controlling interest. 66.67% of Vacances Sinorama is owned by Simon Qian Voyages Inc., a
wholly-owned subsidiary of Sinorama Tours.
The 39% of Sinorama Voyages equity held by
YANG Ming and the 10% of Sinorama Voyages interest held by ZHAO Hongxi are also non-controlling interest, 51% of Sinorama Voyages
interest held by Sinorama Tours.
ASC 810-10-50 requires that the company separately
disclosed amounts attributable to shareholders’ equity and NCIs in the financial statements. For the year ended December
31, 2017, the comprehensive income attributable to shareholders’ equity and NCIs is $(122,472) and $ (468,638), respectively.
For the year ended December 31, 2016, the comprehensive income attributable to shareholders’ equity and non-controlling interest
is $(2,009,734) and $(3,313,812). As of December 31, 2017 and 2016 the NCIs were $(3.492,174) and $(3,369,702).
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 10. INCOME TAX
The Company accounts for income taxes in accordance
with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences
between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect
in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred
tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely
than not that some or all of any deferred tax assets will not be realized.
United States
Sinorama Corporation is subject to the United
States of America tax law at tax rate of 34%. No provision for the US federal income taxes has been made as the Company had no
US taxable income for the periods presented, and its earnings are permanently invested in Canada and Paris.
Samoa
Sinorama Tours Co., Ltd was incorporated in
the Samoa and, under the current laws of the Samoa, it is not subject to income tax.
Canada
Simon Qian Voyages Inc. and Vacances Sinorama
Inc. were incorporated in Canada and is subject to Canadian income tax. Simon Qian Voyages Inc. and Vacances Sinorama Inc.
are subject to Canadian taxation on its activities conducted in Canada and income arising in or derived from Canada. The applicable
statutory tax rate is 26.8%.
France
Sinorama Voyages was incorporated in France
and is subject to France profit tax. Sinorama Voyages are subject to France taxation on its activities conducted in France and
income arising in or derived from France. The applicable statutory tax is 33.33 %.
The provision (benefit) for income taxes consists
of the following for the years ended December 31, 2017 and 2016:
|
|
2017
|
|
|
2016
|
|
Current:
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
-
|
|
|
$
|
-
|
|
Canada
|
|
|
-
|
|
|
|
(71,744
|
)
|
France
|
|
|
-
|
|
|
|
14,790
|
|
Current provision
|
|
|
-
|
|
|
|
(56,954
|
)
|
|
|
|
|
|
|
|
|
|
Deferred:
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
-
|
|
|
$
|
-
|
|
Canada
|
|
|
-
|
|
|
|
-
|
|
France
|
|
|
-
|
|
|
|
-
|
|
Deferred provision
|
|
|
-
|
|
|
|
-
|
|
Total provision for income taxes
|
|
|
-
|
|
|
|
(56,954
|
)
|
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 10. INCOME TAX (Continued)
The reconciliation of the income tax provision
(benefit) to the amount computed by applying the statutory income tax rates to income before income taxes is as follows:
|
|
2017
|
|
|
2016
(Restated)
|
|
Income tax provision (benefit) at the statutory tax rates
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
(92,964
|
)
|
|
$
|
(104,323
|
)
|
Canada
|
|
|
186,319
|
|
|
|
(804,895
|
)
|
France
|
|
|
(194,030
|
)
|
|
|
(781,652
|
)
|
|
|
|
(100,675
|
)
|
|
|
(1,690,870
|
)
|
Valuation allowance on U.S. net operating loss carryforwards
|
|
|
100,675
|
|
|
|
1,633,916
|
|
Total income tax provision (benefit)
|
|
$
|
-
|
|
|
$
|
(56,954
|
)
|
Based upon an assessment of the level of taxable
income and projections for future taxable income over the periods in which the deferred tax assets are deductible or can be utilized,
the Company provided valuation allowance of $100,675 as of December 31, 2017.
The Company evaluates its valuation
allowance requirements at end of each reporting period by reviewing all available evidence, both positive and negative, and considering
whether, based on the weight of that evidence, a valuation allowance is needed. When circumstances cause a change in management’s
judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected
in income from operations. The future realization of the tax benefit of an existing deductible temporary difference ultimately
depends on the existence of sufficient taxable income of the appropriate character within the carryforward period available under
applicable tax law.
At December 31, 2017, Sinorama Corporation
had net operating loss carryforwards of approximately $580,254, Vacances Sinorama Inc. had net operating loss carryforwards of
approximately $2,192,367, Sinorama Voyages had net operating loss carryforwards of approximately $3,019,784, the company had a
total net operating loss carryforwards of approximately $5,792,405.
NOTE 11. RELATED PARTY TRANSACTIONS
Amount due from related parties
Amount due from related parties consisted of the
following as of the periods indicated:
|
|
December 31,
|
|
Name of related parties
|
|
2017
|
|
|
2016
|
|
Sinorama Reisen GmbH
|
|
$
|
4,243,746
|
|
|
$
|
1,469,472
|
|
Sinorama Holiday Inc.
|
|
|
2,790,843
|
|
|
|
1,154,894
|
|
Sinorama Group LLC
|
|
|
-
|
|
|
|
1,453
|
|
Sinorama Holiday Limited
|
|
|
2,388,881
|
|
|
|
935,418
|
|
Sinorama Travel Inc.
|
|
|
302,835
|
|
|
|
|
|
Others
|
|
|
-
|
|
|
|
2,621
|
|
Total
|
|
$
|
9,726,305
|
|
|
$
|
3,563,858
|
|
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 11. RELATED PARTY TRANSACTIONS (continued)
Amount due from related parties
(continued)
As of December 31, 2017 and 2016, the Company
had a balance due from Sinorama Reisen GmbH, which is 65% owned by the Chief Executive Officer (JING Wenjia), of $4,243,746 and
$1,469,472, respectively. The amount was paid to suppliers for Sinorama Reisen GmbH to get favorable price in Group-buying, in
order to reserve tour availabilities. The prepayment was non-interest bearing, payable on demand.
As of December 31, 2017 and 2016, the Company
had a balance due from Sinorama Group LLC., which is 100% owned by the Chairman (QIAN Hong) of the Company, of $nil and $1,453,
respectively.
As of December 31, 2017 and 2016, the Company
has a balance due from Sinorama Holiday Inc., which is 40% owned by the Chairman (QIAN Hong) of the Company and 20% owned by the
Chief Executive Officer (JING Wenjia), of $2,790,843 and $1,154,894, respectively. The balance due, which arose from the purchase
by Sinorama Holiday Inc. of travel products from Vacances Sinorama Inc., is non-interest bearing and due on demand.
As of December 31, 2017 and 2016, the Company
had a balance due from Sinorama Holiday Limited, which is 51% owned by the Chairman (QIAN Hong) of the Company, of $2,388,881 and
$935,418, respectively. The balance due, which arose from the purchase by Sinorama Holiday Limited of travel products from Vacances
Sinorama Inc, is non-interest bearing and due on demand.
As of December 31, 2017 and 2016, the Company
had a balance due from Sinorama Travel Inc., which is 51% owned by the Chairman (QIAN Hong), of $302,835 and $nil, respectively.
The balance due, which arose from the purchase by Sinorama Travel Inc. of travel products from Vacances Sinorama Inc, is non-interest
bearing and due on demand.
Amount due to related parties
Amount due to related parties consisted of the
following as of the periods indicated:
|
|
December 31,
|
|
Name of related parties
|
|
2017
|
|
|
2016
|
|
Sinorama Travel Vancouver Inc.
|
|
$
|
-
|
|
|
$
|
1,423,231
|
|
Simon Qian& Jing Wenjia
|
|
|
7,576
|
|
|
|
12,202
|
|
|
|
$
|
7,576
|
|
|
$
|
1,435,433
|
|
As of December 31, 2017 and 2016, the Company
had a balance due to Sinorama Travel Inc., which is 51% owned by the Chairman (QIAN Hong), of $nil and $1,423,231, respectively.
Such payments were required by suppliers in China to be made in advance, in order to book tour availabilities. The amount was non-interest
bearing and was due on demand.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 11. RELATED PARTY TRANSACTIONS (Continued)
As of December 31, 2017 and 2016, the Company
had a balance due to Simon Qian, the Chairman of the Company, and JING Wenjia, who is the Chief Executive Officer of the Company
and owns 54.33% ownership of the Company. The Company had a balance due to Simon Qian and Jing Wenjia on those dates of $7,656
and $12,202, respectively. The debt was non-interest bearing and due on demand.
Related parties’ transactions
Sales of travel product to related parties
consisted of the following for the periods indicated:
|
|
For the Year ended December 31,
|
|
Name of related parties
|
|
2017
|
|
|
2016
|
|
Sinorama Reisen GmbH
|
|
$
|
7,789
|
|
|
$
|
378
|
|
Sinorama Holiday Limited
|
|
|
3,714,825
|
|
|
|
3,767,725
|
|
Sinorama Holiday Inc.
|
|
|
14,667,058
|
|
|
|
11,990,715
|
|
Sinorama Travel Vancouver Inc.
|
|
|
984,494
|
|
|
|
10,523,376
|
|
Total
|
|
$
|
19,374,166
|
|
|
$
|
26,282,194
|
|
NOTE 12. CONTINGENCIES AND COMMITMENT
Certain conditions may exist as of the date
the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when
one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities,
and such assessment inherently involves an exercise of judgment. There was no contingency of this type as of December 31, 2017
and 2016.
If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated
liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss
contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. There was no
contingency of this type as of December 31, 2017 and 2016.
Loss contingencies considered to be remote
by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.
In June, 2016 Vacances Sinorama leased office
space under non-cancellable operating lease agreements. Under the terms of the lease, Vacances Sinorama paid approximately $61,669
in lease deposits, and made lease payments of approximately $290,734 per year. Under terms of the lease agreement, from June, 2017,
Vacances Sinorama is committed to lease payments for 120 months.
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 12. CONTINGENCIES AND COMMITMENT (Continued)
This office is used for the Information Technology
Department, Electronic Commerce Department and Market Department and other departments.
Vacances Sinorama leases office space under
non-cancellable operating lease agreements, to be used for the Airline Ticket Department, Asia Tour Department and others departments.
The initial leases expired on various dates through 2016. Under the terms of those leases, Vacances Sinorama paid approximately
$22,061 in lease deposits and committed to lease and management fee payments of approximately $12,080 per month for 60 months.
In March 2016, Vacances Sinorama entered into a renewed lease agreement, which replaced its expired operating lease agreements.
Under the current terms of the lease, Vacances Sinorama is committed to lease and management fee payments of approximately $15,515
per month for 60 months.
In July 2015, Vacances Sinorama entered into
a new lease agreement for the Bus Tour Department office. Under the terms of the lease, Vacances Sinorama paid approximately $15,194
in lease deposits, and is committed to lease and management fee payments of approximately $5,134 per month for 60 months.
In February, 2015, Sinorama Voyages leased
office space under a non-cancellable operating lease agreement. Under the terms of the lease, Sinorama Voyages paid approximately
$13,894 in lease deposits, and lease expense payments of approximately $4,869 per month. Under the terms of the lease agreement,
from February, 2016, Sinorama Voyages was committed to lease expense payments of approximately $4,857 per month for 96 months.
Future annual minimum lease payments, for non-cancellable
operating leases are as follows:
Year ending December 31
|
|
Amount $
|
|
2018
|
|
|
534,582
|
|
2019
|
|
|
534,582
|
|
2020
|
|
|
534,582
|
|
2021
|
|
|
471,685
|
|
2022
|
|
|
313,285
|
|
SINORAMA CORPORATION
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
FOR THE YEAR ENDED DECEMBER 31, 2017 AND 2016
|
(EXPRESSED IN US DOLLARS)
|
NOTE 13. BASIC AND DILUTED EARNINGS PER SHARE
Basic net income per share is computed using
the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the
weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common
shares comprise shares issuable upon the exercise of share based awards, using the treasury stock method. The reconciliation of
the numerators and denominators of the basic and diluted earnings per share computations for income from continuing operations
is shown as follows:
|
|
The Year Ended December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net income available to common stockholders
|
|
$
|
(464,377
|
)
|
|
$
|
(3,455,486
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
Basic and diluted weighted-average number of shares outstanding
|
|
|
15,054,639
|
|
|
|
11,786,889
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
(0.03
|
)
|
|
$
|
(0.29
|
)
|
NOTE 14. SUBSEQUENT EVENT
The Management of the Company evaluated subsequent
events through the date these financial statements are available for issuance determined that there were no other reportable subsequent
events to be disclosed.