China Finance Online Co. LTD

CIK:0001297830|SEC Filings

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net revenues
Total revenue from external customers	$ 40,033,097	$ 35,518,790	$ 45,477,926
Cost of revenues	14,326,803	12,974,135	16,841,915
Gross profit	25,706,294	22,544,655	28,636,011
Operating expenses:
General and administrative (including share-based compensation of $1,829,364, $977,519 and $827,657 for 2018, 2019 and 2020, respectively)	11,340,895	12,186,108	14,254,137
Product development (including share-based compensation of $191,708, $62,298 and $113,796 for 2018, 2019 and 2020, respectively)	8,109,188	9,144,180	13,924,460
Sales and marketing (including share-based compensation of $219,440, $74,011 and $45,379 for 2018, 2019 and 2020, respectively)	17,419,252	13,363,921	22,065,504
Total operating expenses	36,869,335	34,694,209	50,244,101
Income (loss) from operations	(11,163,041)	(12,149,554)	(21,608,090)
Interest income	18,141	33,397	96,679
Interest expense			(1,101)
Exchange gain (loss), net	(227,336)	(134,172)	246,680
Loss on the interest sold and retained noncontrolling investment		(299,645)	(1,186,852)
Loss from equity investments without readily determinable fair value	(449,432)
Income (Loss) from equity method investment	(775,269)	391	470
Other income, net	1,064,127	22,692	34,498
Loss before income tax expense	(11,532,810)	(12,526,891)	(22,417,716)
Income tax benefit (expense)	182,602	(216,857)	(52,779)
Net loss	(11,350,208)	(12,743,748)	(22,470,495)
Less: net loss attributable to the noncontrolling interest	(792,039)	(1,480,927)	(2,520,375)
Net loss attributable to China Finance Online Co. Limited	$ (10,558,169)	$ (11,262,821)	$ (19,950,120)
Net loss per share attributable to China Finance Online Co. Limited
Basic and Diluted	$ (0.09)	$ (0.10)	$ (0.18)
Weighted average shares used in calculating net loss per share
Basic and Diluted	115,060,781	114,687,282	113,883,030
Other comprehensive income (loss), net of tax:
Changes in foreign currency translation adjustment	$ (125,606)	$ 120,762	$ (362,398)
Net unrealized gain (loss) from short-term investments available-for-sale	599	11,743	(72,755)
Less: reclassification adjustment for net unrealized (gains) losses included in net income	(599)	(11,743)	72,755
Other comprehensive income (loss), net of tax	(125,606)	120,762	(362,398)
Comprehensive loss	(11,475,814)	(12,622,986)	(22,832,893)
Less: comprehensive loss attributable to the noncontrolling interest	(792,039)	(1,480,927)	(2,520,375)
Comprehensive loss attributable to China Finance Online Co. Limited	(10,683,775)	(11,142,059)	(20,312,518)
Hong Kong Brokerage Services Revenues
Net revenues
Total revenue from external customers	12,110,117	15,799,347	22,343,950
Financial Information and Advisory Services Revenues
Net revenues
Total revenue from external customers	17,465,197	10,674,164	14,891,267
Advertising Revenues
Net revenues
Total revenue from external customers	9,176,706	8,310,150	7,312,947
Mutual Funds Distribution Revenues
Net revenues
Total revenue from external customers	$ 1,281,077	$ 735,129	879,802
Others
Net revenues
Total revenue from external customers			$ 49,960

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating activities:
Net loss	$ (11,350,208)	$ (12,743,748)	$ (22,470,495)
Adjustments to reconcile net loss to net cash provided by Operating activities:
Share-based Compensation	986,833	1,113,828	2,240,512
Depreciation and amortization	1,128,014	1,214,354	1,697,700
Provision of allowance for doubtful accounts	(1,139,658)	(1,226,833)	(149,429)
Loss from equity investments without a readily determinable fair value	449,432
Income (Loss) from equity method investment	775,269	(391)	(470)
(Gain) Loss from short-term investments	(599)	(11,743)	72,755
Deferred taxes	(385,654)	72,770	(116,254)
Loss on disposal of property and equipment	10,054	367,221	854,160
Loss on the interest sold and retained noncontrolling investment		299,645	1,186,852
Changes in assets and liabilities:
Accounts receivable, others	(1,462,023)	(5,014,134)	1,774,118
Accounts receivable, margin clients	3,845,695	5,373,265	(9,600,921)
Prepaid expenses and other current assets	(584,553)	1,554,475	559,702
Non-cash lease expense	2,446,705	2,832,968
Trust bank balances held on behalf of customers	2,984,367	(5,618,799)	7,601,562
Rental deposits	15,133	185,294	138,485
Guarantee deposit funds			307,883
Deferred revenue	3,444,990	873,728	(1,659,248)
Account payable	(2,765,810)	3,758,493	(6,473,854)
Accrued expenses and other current liabilities	2,723,456	(3,782,481)	(683,420)
Operating lease liabilities	(2,388,356)	(3,134,235)
Amounts due to customers for the trust bank balance held on their behalf	(2,984,367)	5,618,799	(7,601,562)
Income taxes payable	(95,433)	21,901	(392,551)
Net cash used in operating activities	(4,346,713)	(8,245,623)	(32,714,475)
Investing activities:
Purchase of property and equipment	(58,535)	(1,552,537)	(340,629)
Proceeds from disposal of affiliates (Note 9)			4,950
Purchase of short-term investments		(10,091,454)	(8,995,273)
Proceeds from sales of short-term investments	1,226,713	8,956,178	9,437,363
Net cash provided by (used in) investing activities	1,168,178	(2,687,813)	106,411
Financing activities:
Proceeds from stock options exercised by employees and issuance of ordinary shares	5	4,997	600
Funds received/(repaid) from/to third-party investors	(891,744)	4,947,000	4,466,000
Funds received from third party		4,116,257
Funds paid to third party	(33,226)	(1,062,380)
Net cash provided by (used in) financing activities	(924,965)	8,005,874	4,466,600
Effect of exchange rate changes	658,175	34,251	(93,906)
Net decrease in cash and cash equivalents	(3,445,325)	(2,893,311)	(28,235,370)
Cash, cash equivalents and restricted cash at beginning of the year	9,599,824	12,493,135	40,728,505
Cash, cash equivalents and restricted cash at end of the year	6,154,499	9,599,824	12,493,135
Supplemental disclosure of cash flow information
Income taxes paid	112,550	10,130	504,462
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:
Cash and cash equivalents	6,154,499	9,599,824	12,493,135
Cash, cash equivalents and restricted cash at end of the year	$ 6,154,499	$ 9,599,824	$ 12,493,135

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 6,154,499	$ 9,599,824
Prepaid expenses and other current assets	3,175,281	2,412,941
Trust bank balances held on behalf of customers	34,309,103	36,987,484
Accounts receivable - margin clients, net of allowance for expected credit losses of $1,153,521 and $2,162,339 in 2019 and 2020, respectively	10,545,377	13,451,583
Accounts receivable - others, net of allowance for expected credit losses of $234,439 and $252,324 in 2019 and 2020, respectively	14,067,201	12,382,170
Short - term investments		1,146,756
Total current assets	68,251,461	75,980,758
Property and equipment, net	3,345,751	4,271,733
Acquired intangible assets, net	63,589	74,477
Equity investments without readily determinable fair value	1,241,398	1,605,459
Equity method investment, net		766,583
Right-of-use assets	2,073,263	3,988,004
Rental deposits	792,702	769,961
Goodwill	108,901	108,416
Guarantee fund deposits	219,270	218,293
Deferred tax assets	1,860,971	1,380,842
Total assets	77,957,306	89,164,526
Current liabilities:
Deferred revenue, current (including deferred revenue, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $8,060,844 and $12,326,306 as of December 31, 2019 and December 31, 2020, respectively)	13,157,404	8,854,985
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $5,068,001 and $7,370,111 as of December 31, 2019 and December 31, 2020, respectively)	16,626,312	14,400,050
Amounts due to customers for the trust bank balances held on their behalf (including amounts due to customers for the trust bank balances held on their behalf of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $2,109,546 and $2,351,030 as of December 31, 2019 and December 31, 2020, respectively)	34,309,103	36,987,484
Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $184,720 and $337,787 as of December 31, 2019 and December 31, 2020, respectively)	4,024,179	6,741,181
Lease liabilities, current (including lease liabilities, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $1,604,241 and $524,780 as of December 31, 2019 and December 31, 2020, respectively)	1,727,228	2,242,757
Income taxes payable (including income taxes payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $44,128 and $56,291 as of December 31, 2019 and December 31, 2020, respectively)	86,170	177,151
Total current liabilities	69,930,396	69,403,608
Loan from third party	3,193,610	3,019,863
Deferred revenue, non-current (including deferred revenue, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited nil and nil as of December 31, 2019 and December 31, 2020, respectively)	113,793	151,490
Deferred tax liabilities (including deferred tax liabilities, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited nil and nil as of December 31, 2019 and December 31, 2020, respectively)	12,547	14,211
Lease liabilities, non-current (including lease liabilities, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $741,269 and $235,666 as of December 31, 2019 and December 31, 2020, respectively)	67,910	1,447,328
Total liabilities	73,318,256	74,036,500
Leases and contingencies (Note 21)
China Finance Online Co. Limited shareholders’ equity:
Ordinary shares (122,098,018 and 122,098,018 shares issued and outstanding as of December 31, 2019 and 2020, respectively)	57,006,534	57,006,534
Additional paid-in capital	37,813,172	36,925,874
Accumulated other comprehensive income	6,286,949	6,412,555
Retained deficits	(85,747,246)	(75,189,077)
Total shareholders’ equity attributable to China Finance Online Co. Limited shareholders	15,359,409	25,155,886
Noncontrolling interest	(10,720,359)	(10,027,860)
Total shareholders' equity	4,639,050	15,128,026
Total liabilities and shareholders’ equity	$ 77,957,306	$ 89,164,526