10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number:  001-36055

China Commercial Credit, Inc.

(Exact name of registrant as specified in its charter)

Delaware	45-4077653
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

890 Yongkang Road, Wujang

Suzhou, Jiangsu Province

People’s Republic of China

(Address of principal executive offices)

+86-512 6396-0022

 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

As of November 11, 2016, 16,637,679 shares of the Company’s Common Stock, $0.001 par value per share, were issued and outstanding.

CHINA COMMERCIAL CREDIT, INC.

CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2016 (Unaudited)			2015
ASSETS
Cash	$	1,167,361		$	306,401
Restricted cash		9,925			388,361
Notes receivable		142,424			15,404
Loans receivable, net of allowance for loan losses of $54,104,303 and $55,595,653 for September 30, 2016 and December 31, 2015, respectively		5,436,035			7,481,067
Investment in direct financing lease, net of allowance for direct financing lease losses of $2,542,163 and $2,857,554 for September 30, 2016 and December 31, 2015, respectively		907,017			1,177,442
Due from a related party		1,918,977			-
Property and equipment, net		120,493			126,120
Intangible asset		969			4,435
Guarantee paid on behalf of guarantee service customers		12,147,982			14,031,603
Guarantee paid on behalf of related party		324,005			622,807
Other assets		277,403			293,200
Total Assets	$	22,452,591		$	24,446,840
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Short-term bank loans	$	-		$	2,618,729
Deposits payable		779,584			1,070,598
Unearned income from financial guarantee services and finance lease services		36,406			61,302
Accrual for financial guarantee services		18,309,981			19,322,557
Other current liabilities		297,059			182,242
Income tax payable		162,206			126,485
Deferred tax liability		158,980			204,266
Total Liabilities		19,744,216			23,586,179
Shareholders' Equity
Series A Preferred Stock (par value $0.001 per share, 1,000,000 shares authorized at September 30, 2016 and December 31, 2015, respectively; nil and nil shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively)	$	-		$	-
Series B Preferred Stock (par value $0.001 per share, 5,000,000 shares authorized at September 30, 2016 and December 31, 2015, respectively; nil and nil shares issued and outstanding at September 30, 2015 and December 31, 2015, respectively)		-			-
Common stock (par value $0.001 per share, 100,000,000 shares authorized; 16,137,679 and 12,390,062 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively)		16,138			12,390
Subscription receivable		(1,062	)		(1,062	)
Additional paid-in capital		62,514,540			59,698,864
Statutory reserve		5,442,150			5,442,150
Due from a non-controlling shareholder		(1,049,441	)		(1,078,300	)
Accumulated deficit		(69,460,635	)		(68,254,520	)
Accumulated other comprehensive income		5,246,685			5,041,139
Total Shareholders’ Equity		2,708,375			860,661
Total Liabilities and Shareholders’ Equity	$	22,452,591		$	24,446,840

* All of the VIEs’ assets can be used to settle obligations of their primary beneficiary. Liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets (Note 1).

See notes to the consolidated financial statements

1

CHINA COMMERCIAL CREDIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016 (Unaudited)			2015 (Unaudited)			2016 (Unaudited)			2015 (Unaudited)
Interest income
Interests and fees on loans and direct financing lease	$	722,117		$	156,498		$	1,203,663		$	2,345,493
Interests on deposits with banks		263			7,054			3,526			15,378
Total interest and fee income		722,380			163,552			1,207,189			2,360,871
Interest expense											-
Interest expense on short-term bank loans		-			(96,880	)		(30,057	)		(422,710	)
Net interest income		722,380			66,672			1,177,132			1,938,161
Reversal of provision /(Provision) for loan losses		226,694			(29,210,186	)		133,177			(30,762,076	)
Reversal of provision /(Provision) for direct financing lease losses		242,180			(163,922	)		242,180			343,612
Net interest income /(loss) after provision for loan losses and financing lease losses		1,191,254			(29,307,436	)		1,552,489			(28,480,303	)
Commissions and fees on financial guarantee services		9,117			24,565			26,308			120,623
(Provision)/Reversal of provision for financial guarantee services		(599,808	)		(7,322,936	)		385,352			(9,035,700	)
Commission and fee (loss) /income  on guarantee services, net		(590,691	)		(7,298,371	)		411,660			(8,915,077	)
Net Revenue/(Loss)		600,563			(36,605,807	)		1,964,149			(37,395,380	)
Non-interest income
Other non-interest income		-			19,439			48,945			34,024
Total  non-interest income		-			19,439			48,945			34,024
Non-interest expense
Salaries and employee surcharge		(120,130	)		(131,778	)		(548,978	)		(654,729	)
Rental expenses		(28,132	)		(83,501	)		(64,850	)		(223,786	)
Business taxes and surcharge		9,617			(12,008	)		(21,798	)		(94,119	)
Other operating expenses		(1,086,092	)		(348,094	)		(2,583,027	)		(1,692,323	)
Total non-interest expense		(1,224,737	)		(575,381	)		(3,218,653	)		(2,664,957	)
Foreign exchange (loss)/gain		(271	)		1,194			(557	)		(8,550	)
Loss Before Income Taxes		(624,445	)		(37,160,555	)		(1,206,116	)		(40,034,863	)
Income tax expense/(credit)		-			58,609			-			(594,650	)
Net Loss		(624,445	)		(37,101,946	)		(1,206,116	)		(40,629,513	)
Loss per Share- Basic and Diluted	$	(0.039	)	$	(2.994	)	$	(0.086	)	$	(3.295	)
Weighted Average Shares Outstanding-Basic and Diluted		15,889,853			12,390,062			14,026,815			12,330,721
Net Loss		(624,445	)		(37,101,946	)		(1,206,116	)		(40,629,513	)
Other comprehensive income/(loss)
Foreign currency translation adjustment		260,803			(1,352,337	)		205,546			(973,282	)
Comprehensive Loss	$	(363,642	)	$	(38,454,283	)	$	(1,000,570	)	$	(41,602,795	)

See notes to the consolidated financial statements

2

CHINA COMMERCIAL CREDIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For The Nine Months Ended September 30,
	2016 (Unaudited)			2015 (Unaudited)
Cash Flows from Operating Activities:
Net loss	$	(1,206,116	)	$	(40,629,513	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		46,455			89,841
(Reversal of provision) /Provision for loan losses		(133,177	)		30,762,076
Reversal of provision for direct financing lease losses		(242,180	)		(343,612	)
(Reversal of provision)/ Provision for financial guarantee services		(385,352	)		9,035,700
Deferred tax (credit)/expense		(40,364	)		587,141
Income from disposal of property and equipment		(48,945	)		(14,585	)
Restricted shares issued to executive officers and professional services		1,354,424			248,400
Provision for settlement expenses against legal proceedings		465,000			-
Changes in operating assets and liabilities:
Interest receivable		-			473,968
Other assets		8,060			(258,035	)
Unearned income from guarantee services and finance lease services		(23,572	)		(96,730	)
Other current liabilities		118,255			(30,910	)
Income tax payable		39,641			(16,845	)
Net Cash Used in Operating Activities		(47,871	)		(193,104	)
Cash Flows from Investing Activities:
Originated loans disbursement to third parties		-			(17,934,721	)
Loans collection from third parties		2,147,593			23,623,776
Payment of loans on behalf of guarantees		(127,886	)		(5,639,237	)
Payment of loans on behalf of a related party		-			(263,687	)
Collection from guarantees for loan paid on behalf of customers		1,825,730			749,980
Collection of principal of finance lease, in installments		484,361			422,199
Deposit released from banks for financial guarantee services		801,530			1,870,298
Deposit paid to banks for financial guarantee services		(694,403	)		(303,634	)
Purchases of property and equipment and intangible asset		(48,342	)		(1,461	)
Disposal of property and equipment		56,557			18,635
Short-term loan paid to a related party		(1,945,224	)		-
Net Cash Provided by Investing Activities		2,499,916			2,542,148
Cash Flows From Financing Activities:
Cash raised in private placement		1,000,000			-
Repayment of short-term bank borrowings		(2,600,832	)		(6,641,289	)
Net Cash Used in Financing Activities		(1,600,832	)		(6,641,289	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		9,747			(35,845	)
Net Increase/(Decrease) In Cash and Cash Equivalents		860,960			(4,328,090	)
Cash and Cash Equivalents at Beginning of Period		306,401			4,991,973
Cash and Cash Equivalents at End of Period	$	1,167,361		$	663,883
Supplemental Cash Flow Information
Cash paid for interest expense	$	30,057		$	422,710
Cash paid for income tax	$	-		$	3,563

See notes to the consolidated financial statements

3

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

China Commercial Credit, Inc. (“CCC” or “the Company”) is a holding company that was incorporated under the laws of the State of Delaware on December 19, 2011.

Wujiang Luxiang Rural Microcredit Co., Ltd (“Wujiang Luxiang”) is a company established under the laws of the PRC on October 21, 2008 and its shareholders consist of 11 companies established under the laws of the People's Republic of China (“PRC”) and 1 PRC individual, Mr. Qin Huichun, the Company's former CEO (collectively, the "Wujiang Luxiang Shareholders"). The Company is a microcredit company primarily engaged in providing direct loans and financial guarantee services to small-to-medium sized enterprises (“SMEs”), farmers and individuals in Wujiang City, Jiangsu Province, PRC.

On August 7, 2012, CCC entered into certain share exchange agreements with 16 PRC individuals, each of whom is the sole shareholder of a British Virgin Island company (collectively “16 BVI entities”) and the 16 BVI entities. These 16 PRC individuals represent the ultimate owners of the Wujiang Luxiang Shareholders.

Upon completion of the share exchange, the 16 PRC individuals, through their respective BVI entities, acquired 7,270,920 shares of Common Stock, par value $0.001 per share (the "Common Stock") of CCC in exchange for their agreement to cause the Wujiang Luxiang Shareholders to enter into the Variable Interest Entity (the “VIE”) Agreements. As a result of the share exchange, the 16 BVI entities became CCC shareholders, who collectively owned approximately 90% of CCC’s total issued and outstanding shares of Common Stock at the time of the share exchange.

Since at the time of the share exchange neither CCC nor the 16 BVI entities had any operations and only a minor amount of net assets, the share exchange shall be considered as a capital transaction in substance, rather than a business combination.

The share exchange is recorded as a “reverse recapitalization” equivalent to the issuance of stocks to the 16 BVI entities for the net monetary assets of CCC. The accounting for the transaction is identical to a reverse acquisition, except that no goodwill is recorded.

Management of the Company looked through the 16 BVI entities and treated the share exchange as a reverse merger between CCC and Wujiang Luxiang for accounting purposes, even though the share exchange was between CCC and the 16 BVI entities, because of the following reasons: (i) neither CCC nor the 16 BVI entities had any operations and only a minor amount of net assets; (ii) the 16 PRC individual, who are the owners of the 16 BVI entities, are the ultimate owners of Wujiang Luxiang, and (iii) the sole purpose of the share exchange was to issue approximately 90% of pre-public offering CCC shares to the ultimate owners of Wujiang Luxiang Shareholders.

VIE AGREEMENTS WITH WUJIANG LUXIANG

Subsequent to the share exchange, on September 26, 2012, the Company through its indirectly wholly owned subsidiary, Wujiang Luxiang Information Technology Consulting Co. Ltd. (“WFOE”), entered into a series of VIE Agreements with Wujiang Luxiang and the Wujiang Luxiang Shareholders. The purpose of the VIE Agreements is solely to give WFOE the exclusive control over Wujiang Luxiang’s management and operations.

The significant terms of the VIE Agreements are summarized below:

Exclusive Business Cooperation Agreement

Pursuant to the Exclusive Business Cooperation Agreement between Wujiang Luxiang and WFOE, WFOE provides Wujiang Luxiang with technical support, consulting services and other management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, Wujiang Luxiang grants an irrevocable and exclusive option to WFOE to purchase from Wujiang Luxiang any or all of its assets at the lowest purchase price permitted under PRC laws. For services rendered to Wujiang Luxiang by WFOE under the Agreement, the service fee Wujiang Luxiang is obligated to pay shall be calculated based on the time of services rendered multiplied by the corresponding rate, which is approximately equal to the net income of Wujiang Luxiang.

The Exclusive Business Cooperation Agreement shall remain in effect for ten years unless it is terminated by WFOE with 30-day prior notice. Wujiang Luxiang does not have the right to terminate the agreement unilaterally. WFOE may unilaterally extend the term of this agreement with prior written notice.

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CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

Share Pledge Agreement

Under the Share Pledge Agreement between the Wujiang Luxiang Shareholders and WFOE, the 12 Wujiang Luxiang Shareholders pledged all of their equity interests in Wujiang Luxiang to WFOE to guarantee the performance of Wujiang Luxiang’s obligations under the Exclusive Business Cooperation Agreement.  Under the terms of the agreement, in the event that Wujiang Luxiang or its shareholders breach their respective contractual obligations under the Exclusive Business Cooperation Agreement, WFOE, as pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests.  The Wujiang Luxiang Shareholders also agreed that upon occurrence of any event of default, as set forth in the Share Pledge Agreement, WFOE is entitled to dispose of the pledged equity interest in accordance with applicable PRC laws.  The Wujiang Luxiang Shareholders further agree not to dispose of the pledged equity interests or take any actions that would prejudice WFOE’s interest.

Exclusive Option Agreement

Under the Exclusive Option Agreement, the Wujiang Luxiang Shareholders irrevocably granted WFOE (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in Wujiang Luxiang.  The option price is equal to the capital paid in by the Wujiang Luxiang Shareholders subject to any appraisal or restrictions required by applicable PRC laws and regulations.

Power of Attorney

Under the Power of Attorney, the Wujiang Luxiang Shareholders authorize WFOE to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders, including but not limited to:  (a) attending shareholders' meetings; (b) exercising all the shareholder's rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of Wujiang Luxiang. The Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution, so long as the Wujiang Shareholder is a shareholder of the Company.

Timely Reporting Agreement

To ensure Wujiang Luxiang promptly provides all of the information that WFOE and the Company need to file various reports with the SEC, a Timely Reporting Agreement was entered between Wujiang Luxiang and the Company.

Under the Timely Reporting Agreement, Wujiang Luxiang agrees that it is obligated to make its officers and directors available to the Company and promptly provide all information required by the Company so that the Company can file all necessary SEC and other regulatory reports as required.

INCORPORATION OF PFL

On September 5, 2013, our wholly owned subsidiary, CCC International Investment Holding Ltd. (“CCC HK”), established Pride Financial Leasing (Suzhou) Co. Ltd. (“PFL”) in Jiangsu Province, China. PFL was expected to offer financial leasing of machinery and equipment, transportation vehicles, and medical devices to municipal government agencies, hospitals and SMEs in Jiangsu Province and beyond. As of September 30, 2016, PFL had two finance lease transactions.

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CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

VIE AGREEMENTS WITH PRIDE INFORMATION

On February 19, 2014, WFOE entered into certain contractual arrangements with Mr. Huichun Qin and Pride Information Technology Co. Ltd. (“Pride Information”), a domestic entity established on February 19, 2014 and 100% owned by Mr. Qin. Pursuant to these contractual arrangements, WFOE shall have the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Pride Information, including absolute control rights and the rights to the assets, property and revenue of Pride Information and as a result, approximately 100% of the net income of Pride Information will be paid as a service fee to WFOE.

The contractual arrangements between WFOE, Pride Information and its sole shareholder, Mr. Huichun Qin, have substantially the same terms as those between WFOE, Wujiang Luxiang and its shareholders.

On April 11, 2015, WFOE delivered a notice of termination to Pride Information. As a result, the contractual arrangements between WFOE, Pride Information and Mr. Qin were terminated effective on May 11, 2015 and WFOE no longer controls Pride Information.

Completion of the Internal Review

Based on the Chief Financial Officer’s review of the books and records of the Company, the Company has made a preliminary determination that following the close of the fiscal quarter ended June 30, 2014, RMB 7 million (approximately $1.1 million) was transferred (the “Transfer at Issue”) from the bank account of WFOE, without authorization to the personal account of a former executive officer of the Company, who was still an executive officer at the time of the transfer. The funds were supposed to be used for the purpose of increasing the registered capital account of Wujiang Luxiang. The Company has sought return of the funds but to date has not recovered them. The Company’s Board of Directors explored all means, including legal avenues, to recover the funds and had formed a Special Committee to undertake an internal review of the circumstances surrounding the transfer.

On January 26, 2015, the Special Committee notified the Board of Directors that the internal review surrounding the Transfer at Issue was completed. The internal review confirmed that Mr. Qin transferred RMB 7 million (approximately $1.1 million) from WFOE’s bank account to his personal bank account. The internal review team was unable to interview Mr. Qin. The missing funds have not yet been recovered and the Company has engaged local PRC counsel to assist in the matter.

During the internal review, the independent counsel examined whether other transfers had occurred that were similar to the Transfer at Issue, in that the Company’s funds were transferred to a related party in a manner that was not consistent with the Company’s corporate governance and internal control procedures. The independent counsel identified four transfers made by Mr. Qin that were not consistent with the Company’s corporate governance and internal control procedures. With respect to the first three transfers, all funds were either returned to the Company or applied to the Company’s business. With respect to the fourth transfer, the funds were used to increase the registered capital of Wujiang Luxiang, a variable interest entity the Company controls via a series of contractual arrangements, as intended and reflected in an application made to the PRC government for such increase of registered capital.

The internal review indicated that the Company’s control deficiencies contributed to the Transfer at Issue. The internal review also found that, since the discovery of the Transfer at Issue, the Company has taken various steps to improve its internal controls and procedures, including implementing a new fund transfer approval policy and procedures and new standards of credit risk assessment which are carried out by the newly formed Loan Review Committee. The internal review conducted by independent counsel engaged by the Special Committee of the Board of Directors observed that such new controls and procedures appear to be much more thorough and comprehensive.

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CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation and principle of consolidation

The interim financial information as of September 30, 2016 and for the three and nine months ended September 30, 2016 and 2015 have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC on April 14, 2016.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s financial position as of September 30, 2016, its results of operations for the three and nine months ended September 30, 2016 and 2015, and its cash flows for the nine months ended September 30, 2016 and 2015, as applicable, have been made. The unaudited interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The unaudited interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

The Company has suffered an accumulated deficit of US$69,460,635 as of September 30, 2016. In addition, the Company had working capital (total consolidated current assets exceeding total consolidated current liabilities) of US$2,745,893, as of September 30, 2016. As of September1 30, 2016, the Company had cash and cash equivalents of US$1,167,361, and total short-term borrowings of US$ nil.

These and other factors disclosed in this quarterly report raise substantial doubt as to the Company’s ability to continue as a going concern. Management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, will provide sufficient liquidity to meet the Company obligations for a reasonable period of time.

● Financial Support

The Company is actively seeking other strategic investors with experience in lending business. If necessary, the shareholders of Wujiang Luxiang will contribute more capital into Wujiang Luxiang. On June 8, 2016, the Company closed a private placement with a third-party individual investor to issue 2,439,025 common shares, at a per share price of US$0.41, and raised US$1,000,000 from therefrom. This transaction was at arm’s length. The shares shall be authorized for listing on the NASDAQ capital market, and the net proceeds of the sale of the shares shall be used by the Company for working capital and general corporate purpose. These issued and outstanding shares are deemed a permanent equity of the Company.

● Improvement in Working Capital Management

In order to meet the capital needs for our continued operations, we continue to use our best effort to improve our collection of loan receivable and interest receivable. We engaged four law firms, Jiangsu Zhenyuzhen Law Firm, Jiangsu Tianbian Law Firm, Jiangsu Mingren Law Firm and He-Partners Law Firm to represent us in the legal proceedings against the borrowers and their counter guarantors. Among them, He-Partners Law Firm, is one of the largest law firms in Suzhou City.

While management believes that the measures in the liquidity plan will be adequate to satisfy its liquidity and cash flow requirements for the twelve months ending September 30, 2017, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan will have a material adverse effect on the Company’s business, results of operations and financial position, and may materially adversely affect its ability to continue as a going concern.

All significant inter-company accounts and transactions have been eliminated in consolidation.

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CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Operating segments

ASC 280, Segment Reporting requires companies to report financial and descriptive information about their reportable operating segments, including segment profit or loss, certain specific revenue and expense items, and segment assets. The Company has no reportable segments. All of the Company's activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with registered capital and other borrowings and manage interest rate and credit risk.

The Company has only one reportable segment, which is to provide financial services in the PRC domestic market, primarily in Wujiang City, Jiangsu Province. The Company’s chief operating decision-maker (“CODM”) has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for both the direct lending and guarantee business and the anticipated financial leasing business. The Company’s net revenues are all generated from customers in the PRC. Hence, the Company operates and manages its business without segments. For the three and nine months ended September 30, 2016 and 2015, there was no one customer that accounted for more than 10% of the Company's revenue.

(c) Cash

Cash consists of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains accounts at banks and has not experienced any losses from such concentrations.

(d) Restricted cash

Restricted cash represents cash pledged with banks as guarantor deposit for the guarantee business customers. The banks providing loans to the Company’s guarantee service customers generally require the Company, as the guarantor of the loans, to pledge a cash deposit of 10% to 20% of the guaranteed amount to an escrow account and is restricted from use. The deposits are released after the guaranteed bank loans are paid off and the Company’s guarantee obligation expires which is usually within 12 months.

(e) Loans receivable, net

Loans receivable primarily represent loan amount due from customers. The management has the intent and ability to hold such receivable for the foreseeable future or until maturity or payoff. Loans receivable are recorded at unpaid principal balances, net of allowance for loan losses that reflects the Company’s best estimate of the amounts that will not be collected. Loan origination and commitment fees and certain direct loan origination costs collected from customers are directly recorded in current year interests and fees on loans. The loans receivable portfolio consists of corporate loans and personal loans (Note 6). The Company does not charge loan origination and commitment fees.

(f) Allowance for loan losses

The allowance for loan losses is increased by charges to income and decreased by charge offs (net of recoveries). Recoveries represent subsequent collection of amounts previously charged-off. The increase in allowance for loan losses is the netting effect of “reversal” and “provision” for both business and personal loans. If the ending balance of the allowance for loan losses after any charge offs (net of recoveries) is less than the beginning balance, it will be recorded as a “reversal”; if it is larger, it will be recorded as a “provision” in the allowance for loan loss. The netting amount of the “reversal” and the “provision” is presented in the consolidated statements of operations and comprehensive income (loss).

The Company recognizes a charge-off when management determines that full repayment of a loan is not probable. The primary factor in making that determination is the potential outcome of a lawsuit against the delinquent debtor. The Company will recognize a charge-off when the Company loses contact with the delinquent borrower for more than six months or when the court rules against the Company to seize the collateral asset of the delinquent debt from either the guarantor or borrower.

The allowance for loan losses is maintained at a level believed to be reasonable by management to absorb probable losses inherent in the portfolio as of each balance sheet date. The allowance is based on factors such as the size and current risk characteristics of the portfolio, an assessment of individual loan and actual loss, delinquency, and/or risk rating record within the portfolio (Note 7). The Company evaluates its allowance for loan losses on a quarterly basis or more often as necessary.

8

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(g) Interest receivable

Interest on loans receivable is accrued and credited to income as earned. The Company determines a loan past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days. Additionally, any previously accrued but uncollected interest is reversed. Subsequent recognition of income occurs only to the extent payment is received, subject to management’s assessment of the collectability of the remaining interest and principal. Loans are generally restored to an accrual status when it is no longer delinquent and collectability of interest and principal is no longer in doubt and past due interest is recognized at that time.

The interest reversed due to the above reason was US$3,955,890 and US$2,593,611 as of September 30, 2016 and December 31, 2015, respectively.

(h) Property and equipment

The property and equipment are stated at cost less accumulated depreciation. The depreciation is computed on a straight-line method over the estimated useful lives of the assets with 5% salvage value. Estimated useful lives of property and equipment are stated in Note 12.

The Company eliminates the cost and related accumulated depreciation of assets sold or otherwise retired from the accounts and includes any gain or loss in the statement of income. The Company charges maintenance, repairs and minor renewals directly to expenses as incurred; major additions and betterment to equipment are capitalized.

(i) Impairment of long-lived assets

The Company applies the provisions of ASC No. 360 Sub topic 10, "Impairment or Disposal of Long-Lived Assets"(ASC 360- 10) issued by the Financial Accounting Standards Board ("FASB"). ASC 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

The Company tests long-lived assets, including property and equipment and finite lived intangible assets, for impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the net carrying amount is greater than its fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows as the rate the Company utilizes to evaluate potential investments. The Company estimates fair value based on the information available in making whatever estimates, judgments and projections are considered necessary. There were no impairment losses in the three and nine months ended September 30, 2016 and 2015.

9

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(j) Fair values of financial instruments

ASC Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Topic 825 excludes certain financial instruments and all nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company.

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

As of September 30, 2016 and December 31, 2015, financial instruments of the Company primarily comprise of cash, restricted cash, notes receivable, loan receivables, other receivable, short-term bank loans, deposits payable and accrued expenses, which were carried at cost on the consolidated balance sheets, and carrying amounts approximated their fair values because of their generally short maturities.

(k) Foreign currency translation and transaction

The reporting currency of the Company is United States Dollars (“US$”), which is also the Company’s functional currency. The PRC subsidiaries and VIEs maintain their books and records in its local currency, the Renminbi Yuan (“RMB”), which is their functional currencies as being the primary currency of the economic environment in which these entities operate.

For financial reporting purposes, the financial statements of the Company prepared using RMB, are translated into the Company’s reporting currency, United States Dollars, at the exchange rates quoted by www.oanda.com. Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and shareholders’ equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in shareholders’ equity.

	September 30, 2016		December 31, 2015
Balance sheet items, except for equity accounts		6.6702		6.4917

	For the nine months ended September 30,
	2016		2015
Items in the statements of income and comprehensive income, and statements of cash flows		6.5802		6.1735

Transactions denominated in currencies other than the functional currency are translated into prevailing functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the consolidated statements of comprehensive loss.

(l) Use of estimates

The preparation of consolidated financial statements in conformity with 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 period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the financial statements include: (i) the allowance for doubtful debts; (ii) estimates of losses on unexpired loan contracts and guarantee service contracts; (iii) accrual of estimated liabilities; (iv) useful lives of long-lived assets; (v) the impairment of long-lived assets; (vi) the valuation allowance of deferred tax assets; and (vii) contingencies and litigation.

10

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(m) Revenue recognition

Revenue is recognized when there are probable economic benefits to the Company and when the revenue can be measured reliably, on the following:

● Interest income on loans. Interest on loan receivables is accrued monthly in accordance with their contractual terms and recorded in accrued interest receivable. The Company does not charge prepayment penalty from customers. Additionally, any previously accrued but uncollected interest is discontinued of accrual and reversed, when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days.

● Commission on guarantee service. The Company receives the commissions from guarantee services in full at inception and records as unearned income before amortizing it throughout the period of guarantee.

● Income on direct financing lease. The financing agreements are classified as direct financing lease as prescribed by the Financial Accounting Standards Board ("FASB Codification"). Revenues representing the capitalized costs of the investment are recognized as income upon inception of the leases. The portion of revenues representing the difference between the gross investment in the lease (the sum of the minimum lease payments and the guaranteed residual value, if any) and the sum of the present value of the two components is recorded as unearned income and amortized over the lease term

Taxes assessed by governmental authorities that are directly imposed on revenue-producing transactions between the Company and its customers (which may include, but are not limited to, sales, use, value added and some excise taxes) are excluded from revenues.

Lessees are responsible for all taxes, insurance and maintenance costs.

● Non-interest income. Non-interest income mainly includes rental income from the sub-leasing of certain of the Company’s leased office space to third parties and income from disposal of property and equipment

(n) Financial guarantee service contract

Financial guarantee service contracts provides guarantee which protects the holder of a debt obligation against default. Pursuant to such guarantee, the Company makes payments if the obligor responsible for making payments fails to do so as scheduled.

The contract amounts reflect the extent of involvement the Company has in the guarantee transaction and also represent the Company’s maximum exposure to credit loss in its guarantee business.

11

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(n) Financial guarantee service contract (continued)

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. Financial instruments representing credit risk are as follows:

	September 30, 2016 (Unaudited)		December 31, 2015
Guarantee	$	11,341,455	$	11,653,342

A provision for possible loss to be absorbed by the Company for the financial guarantee it provides is recorded as an accrued liability when the guarantees are made and recorded as “Accrual for financial guarantee services” on the consolidated balance sheets. This liability represents probable losses and is increased or decreased by accruing a “(Provision of)/Reversal of provision for financial guarantee services” against the income of commissions and fees on guarantee services reserve.

This is done throughout the life of the guarantee, as necessary when additional relevant information becomes available. The methodology used to estimate the liability for possible guarantee loss considers the guarantee contract amount and a variety of factors, which include, depending on the counterparty, latest financial position and performance of the borrowers, actual defaults, estimated future defaults, historical loss experience, estimated value of collaterals or guarantees the customers or third parties offered, and other economic conditions such as the economy trend of the area and the country. The estimates are based upon currently available information.

Based on the past experience and expected customer default status of financial guarantee services, the Company estimates the probable loss for immature financial guarantee services to be approximately 50% or 100% of contract amount as of September 30, 2016 and December 31, 2015, and made a provision of US$6,015,092 and US$5,691,253 as of these two reporting dates, respectively, for possible credit risk of its guarantees. In addition, the Company accrued specific provisions for repayment on behalf of guarantee customers who defaulted on their loans, in the amount of US$12,294,889 and US$13,631,304 as of September 30, 2016 and December 31, 2015, respectively. The total accrual for financial guarantee services amounted to US$18,309,981 and US$19,322,557 as of September 30, 2016 and December 31, 2015, respectively. The Company reviews the provision on a quarterly basis.

The Company provided provision of US$385,352 and reversed provision of US$9,035,700 for the nine months ended September, 2016 and 2015, respectively. The provision for the financial guarantee services was US$599,808 and US$7,322,936 for the three months ended September 30, 2016 and 2015, respectively.

During nine months ended September 30, 2016 and December 31, 2015, the management charged off specific provision for one and one customer in the amount of US$116,856 and US$262,422, considering remote collectability from the customers. The Company charged off US $Nil and US$262,422 for the three months ended September 30, 2016 and 2015, respectively.

(o) Non-interest expenses

Non-interest expenses primarily consist of salary and benefits for employees, traveling cost, entertainment expenses, depreciation of equipment, office rental expenses, professional service fee, office supplies, etc.

(p) Income tax

Current income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the liability approach. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income.

(q) Comprehensive income

Comprehensive income includes net income and foreign currency adjustments. Comprehensive income is reported in the statements of operations and comprehensive income.

Accumulated other comprehensive income, as presented on the balance sheets are the cumulative foreign currency translation adjustments.

12

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) Share-based awards

Share-based awards granted to the Company's employees are measured at fair value on grant date and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares.

At each date of measurement, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including but not limited to the fair value of the underlying shares, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the share-based awards changes significantly, share-based compensation expense may differ materially in the future from that recorded in the current reporting period.

(s) Operating leases

The Company leases its principal office under a lease agreement that qualifies as an operating lease. The Company records the rental under the lease agreement in the operating expense when incurred.

(t) Commitments and contingencies

In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450 Sub topic 20, “Loss Contingencies”, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

(u) Recently issued accounting standards

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company is evaluating this ASU and has not determined the effect of this standard on its ongoing financial reporting.

In June 2016, the FASB issued new accounting guidance for recognition of credit losses on financial instruments, which is effective January 1, 2020, with early adoption permitted on January 1, 2019. The guidance introduces a new credit reserving model known as the Current Expected Credit Loss (CECL) model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information and will likely result in earlier recognition of credit reserves. Credco does not intend to adopt the new standard early and is currently evaluating the impact the new guidance will have on its financial position, results of operations and cash flows; however, it is expected that the new CECL model will alter the assumptions used in calculating credit losses on Card Member receivables and loans, among other financial instruments, and may result in material changes to Credco’s credit reserves.

13

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. VARIABLE INTEREST ENTITIES AND OTHER CONSOLIDATION MATTERS

On September 26, 2012, the Company, through WFOE, entered into a series of contractual arrangements, also known as “VIE Agreements” with Wujiang Luxiang and the Wujiang Luxiang Shareholders.

On February 19, 2014, WFOE entered into certain contractual arrangements, having substantially the same terms as those of the VIE Agreements with Pride Information and its sole shareholder, Mr. Huichun Qin. These VIE Agreements were terminated on May 11, 2015 and will be accounted for as a deconsolidation. Pride Information did not have any business since its inception. (See Note 1)

As of September 30, 2016, the Company had only one VIE.

The significant terms of the VIE Agreements are summarized in Note 1.

VIEs are entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. WFOE is deemed to have a controlling financial interest and be the primary beneficiary of the entities mentioned in Note 1 above, because it has both of the following characteristics:

1. power to direct activities of a VIE that most significantly impact the entity’s economic performance, and

2. obligation to absorb losses of the entity that could potentially be significant to the VIE or right to receive benefits from the entity that could potentially be significant to the VIE.

In addition, as all of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through either arbitration or litigation in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company’s ability to enforce these contractual arrangements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these contractual arrangements, it may not be able to exert effective control over Wujiang Luxiang and Pride Information and its ability to conduct its business may be materially and adversely affected.

All of the Company’s main current operations are conducted through Wujiang Luxiang and PFL. Current regulations in China permit Wujiang Luxiang and PFL to pay dividends to us only out of its accumulated distributable profits, if any, determined in accordance with their articles of association and PRC accounting standards and regulations. The ability of Wujiang Luxiang and PFL to make dividends and other payments to the Company may be restricted by factors including changes in applicable foreign exchange and other laws and regulations.

The following financial statement amounts and balances of the VIE were included in the unaudited consolidated financial statements as of September 30, 2016 and audited consolidated financial statements as of December 31, 2015 and for the three and nine months ended September 30, 2016 and 2015:

	September 30, 2016 (Unaudited)		December 31, 2015
Total assets	$	20,216,911	$	22,920,730
Total liabilities	$	20,267,692	$	23,932,841

	For the three months ended September 30,					For the nine months ended September 30,
	2016 (Unaudited)		2015 (Unaudited)			2016 (Unaudited)		2015 (Unaudited)
Revenue	$	672,646	$	120,929		$	1,151,308	$	2,272,057
Net income/(loss)	$	2,807	$	(36,925,013	)	$	910,203	$	(40,083,818	)

14

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. VARIABLE INTEREST ENTITIES AND OTHER CONSOLIDATION MATTERS (CONTINUED)

All of the Company’s current revenue is generated in RMB. Any future restrictions on currency exchanges may limit our ability to use net revenues generated in RMB to make dividends or other payments in US$ or fund possible business activities outside China.

Foreign currency exchange regulation in China is primarily governed by the following rules:

● Foreign Exchange Administration Rules (1996), as amended in August 2008, or the Exchange Rules;

● Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.

Under the Administration Rules, RMB is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service related foreign exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities outside of China, unless the prior approval of the State Administration of Foreign Exchange (“SAFE”) is obtained and prior registration with the SAFE is made. Foreign-invested enterprises like WFOE that need foreign currency for the distribution of profits to their shareholders may validate payment from their foreign currency accounts or purchase and pay foreign currencies at the designated foreign exchange banks to their foreign shareholders by producing board resolutions for such profit distribution. Based on their needs, foreign invested enterprises are permitted to open foreign currency settlement accounts for current account receipts and payments of foreign exchange along with specialized accounts for capital account receipts and payments of foreign currency at certain designated foreign exchange banks.

15

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4. RISKS

(a) Credit risk

Credit risk is one of the most significant risks for the Company’s business. Credit risk exposures arise principally in lending activities, finance lease and financial guarantee activities which is an off-balance sheet financial instrument.

Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Company manages credit risk through in-house research and analysis of the Chinese economy and the underlying obligors and transaction structures. To minimize credit risk, the Company requires collateral in the form of rights to cash, securities or property and equipment.

The Company identifies credit risk collectively based on industry, geography and customer type. This information is monitored regularly by management.

1.1 Lending activities

In measuring the credit risk of lending loans to corporate customers, the Company mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the exposures to the customer and its likely future development. For individual customers, the Company uses standard approval procedures to manage credit risk for personal loans.

In addition, the Company calculates the provision amount as below:

1. General Reserve - is based on total loan receivable balance and to be used to cover unidentified probable loan loss. According to management assessment, the General Reserve is required to be no less than 1% of total loan receivable balance.

2. Special Reserve - is fund set aside covering losses due to risks related to a particular country, region, industry, company or type of loans. The reserve rate could be decided based on management estimate of loan collectability. The Loan portfolio did not include any loans outside of the PRC.

3. Specific Reserve – is based on a loan by loan basis covering losses due to risks related to the ability and intension of repayment of each customer. The reserve rate was individually assessed based on management estimate of loan collectability.

16

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

4. RISKS (CONTINUED)

1.2 Guarantee activities

The off-balance sheet commitments arising from guarantee activities carry similar credit risk to loans and the Company takes a similar approach on risk management.

Off-balance sheet commitments with credit exposures are also assessed and categorized with reference to the Guideline and include additional amounts on a specific basis.

(b) Liquidity risk

The Company is also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

(c) Foreign currency risk

A majority of the Company’s operating activities and a significant portion of the Company’s assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers' invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

(d) Concentration risk

As of September 30, 2016 and December 31, 2015, the Company held cash of US$1,167,361 and US$306,401, respectively, that is uninsured by the government authority.

To limit exposure to credit risk relating to deposits, the Company primarily places cash deposits only with large financial institutions in the PRC with acceptable credit ratings.

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

No customer accounted for more than 10% of total loan balance as of September 30, 2016 and December 31, 2015.

5. RESTRICTED CASH

Restricted cash represents cash pledged with banks as guarantor deposit for the Company's guarantee service customers. The banks providing loans to the Company’s guarantee service customers generally require the Company, as the guarantor of the loans, to pledge a cash deposit usually in the range of 10% to 30% of the guaranteed amount. The deposits are released after the guaranteed bank loans are paid off and the Company’s guarantee obligation expires which is usually within 12 months. However, due to high default rate in the financial guarantee services, the Company narrowed its financial guarantee business from the year ended December 31, 2015. As a result, the Company did not continue guarantor agreements with banks and was not subject to restrictions on deposits in banks. As of September 30, 2016 and December 31, 2015, the balances of restricted cash were minimal, amounting to US$0.01 million and US$0.4 million, respectively.

At the same time, the Company requires the guarantee service customers to make a deposit to the Company of the same amount as the deposit the Company pledged to the banks for their loans. The Company recorded the deposit received as “deposits payable” on the unaudited consolidated balance sheet. The deposit is returned to the customer after the customer repays the bank loan and the Company’s guarantee obligation expires.

17

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. LOANS RECEIVABLE, NET

The interest rates on loan issued ranged between 9.6%~ 19.44% and 9.6%~ 19.44% % for the nine months ended September 30, 2016 and 2015, respectively.

6.1 Loans receivable consist of the following:

	September 30, 2016 (Unaudited)			December 31, 2015
Business loans	$	37,913,015		$	40,498,813
Personal loans		21,627,323			22,577,907
Total Loans receivable		59,540,338			63,076,720
Allowance for loan losses
Collectively assessed		(54,104,303	)		(55,595,653	)
Individually assessed		-			-
Allowance for loan losses		(54,104,303	)		(55,595,653	)
Loans receivable, net	$	5,436,035		$	7,481,067

The Company originates loans to customers located primarily in Wujiang City, Jiangsu Province. This geographic concentration of credit exposes the Company to a higher degree of risk associated with this economic region.

All loans are short-term loans that the Company has made to either business or individual customers. As of September 30, 2016 and December 31, 2015, the Company had 66 and 68 business loan customers, and 42 and 47 personal loan customers, respectively. Most loans are either guaranteed by a third party whose financial strength is assessed by the Company to be sufficient or secured by collateral. Allowance on loan losses are estimated loan by loan on a quarterly basis based on an assessment of specific evidence indicating doubtful collection, historical experience, loan balance aging and prevailing economic conditions.

For the three months ended September 30, 2016 and 2015, a reversal of provision of US$226,694 and a provision of US$29,210,186 were charged to the consolidated statement of income, respectively. For the nine months ended September 30, 2016 and 2015, a reversal of provision of US$133,177 and a provision of US$30,762,076 were charged to the consolidated statement of income, respectively. No Write-offs against allowances have occurred for the three and nine months ended September 30, 2016 and 2015, respectively.

Interest on loans receivable is accrued and credited to income as earned. The Company determines a loan's past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days.

The following table presents nonaccrual loans with aging over 90 days by classes of loan portfolio as of September 30, 2016 and December 31, 2015, respectively:

	September 30, 2016 (Unaudited)		December 31, 2015
Business loans	$	28,914,735	$	21,907,409
Personal loans		11,867,525		10,211,501
	$	40,782,260	$	32,118,910

18

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. LOANS RECEIVABLE, NET (CONTINUED)

The following table represents the aging of loans as of September 30, 2016 by type of loan:

	1-89 Days Past Due (Unaudited)		90 - 179 Days Past Due (Unaudited)		180 - 365 Days Past Due (Unaudited)		Over 1 year Past Due (Unaudited)		Total Past Due (Unaudited)		Current (Unaudited)		Total Loans (Unaudited)
Business loans	$	8,998,280	$	4,950,601	$	7,080,726		16,883,408	$	37,913,015	$	-	$	37,913,015
Personal loans		9,714,822		-		4,627,883		7,239,642		21,582,347		44,976		21,627,323
	$	18,713,102	$	4,950,601	$	11,708,609		24,123,050	$	59,495,362	$	44,976	$	59,540,338

The following table represents the aging of loans as of December 31, 2015 by type of loan:

	1-89 Days Past Due		90 - 179 Days Past Due		180 - 365 Days Past Due		Over 1 year Past Due		Total Past Due		Current		Total Loans
Business loans	$	77,021	$	4,313,200	$	7,555,846		10,038,363	$	21,984,430	$	18,514,383	$	40,498,813
Personal loans		924,257		1,848,514		3,749,403		4,613,584		11,135,758		11,442,149		22,577,907
	$	1,001,278	$	6,161,714	$	11,305,249		14,651,947	$	33,120,188	$	29,956,532	$	63,076,720

6.2 Analysis of loans by credit quality indicator

The following table summarizes the Company’s loan portfolio by credit quality indicator as of September 30, 2016 and December 31, 2015, respectively:

Five Categories	September 30, 2016 (Unaudited)		%			December 31, 2015		%
Pass	$	-		-		$	-		-
Special mention		-		-			-		-
Substandard		-		-			2,695,750		4.3	%
Doubtful		10,872,069		18.3	%		9,841,658		15.6	%
Loss		48,668,269		81.7	%		50,539,312		80.1	%
Total	$	59,540,338		100	%	$	63,076,720		100	%

19

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

6. LOANS RECEIVABLE, NET (CONTINUED)

6.3 Analysis of loans by collateral

The following table summarizes the Company’s loan portfolio by collateral as of September 30, 2016:

	September 30, 2016 (Unaudited)
	Business Loans		Personal Loans		Total
Guarantee backed loans	$	35,592,373	$	20,760,785	$	56,353,158
Pledged assets backed  loans		2,320,642		866,538		3,187,180
Collateral backed loans		-		-		-
	$	37,913,015	$	21,627,323	$	59,540,338

The following table summarizes the Company’s loan portfolio by collateral as of December 31, 2015:

	December 31, 2015
	Business Loans		Personal Loans		Total
Guarantee backed loans	$	37,498,183	$	21,510,390	$	59,008,573
Pledged assets backed  loans		3,000,630		1,067,517		4,068,147
Collateral backed loans		-		--		-
	$	40,498,813	$	22,577,907	$	63,076,720

Collateral Backed Loans

A collateral backed loan is a loan in which the borrower puts up an asset under their ownership, possession or control, as collateral for the loan. An asset usually is land use rights, inventory, equipment or buildings. The loan is secured against the collateral and we do not take physical possession of the collateral at the time the loan is made. We will verify ownership of the collateral and then register the collateral with the appropriate government agencies to complete the secured transaction. In the event that the borrower defaults, we can then take possession of the collateral asset and sell it to recover the outstanding balance owed. If the sale proceed of the collateral asset is not sufficient to pay off the debt, we will file a lawsuit against the borrower and seek payment for the remaining balance.

Pledged Asset Backed Loans

Pledged loans are loans with pledged assets. The pledged assets are usually certificates of deposit. Lenders take physical possession of the pledged assets at the time the loan is made and do not need to register them with government agencies to secure the loan. If the borrower defaults, we can sell the assets to recover the outstanding balance owed.

Both collateral loans and pledged loans are considered secured loans. The amount of a loan that lenders provide depends on the value of the collateral pledged. Beginning 2011, the Company does not provide unsecured loans.

Guarantee Backed Loans

A guaranteed loan is a loan guaranteed by a third party who is usually a corporation or high net worth individual. As of September 30, 2016 and December 31, 2015, guaranteed loans make up 94.6% and 93.6% of our direct loan portfolio, respectively.

20

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss history, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The allowance is calculated at portfolio-level since our loans portfolio is typically of smaller balance homogenous loans and is collectively evaluated for impairment. Additionally, the management also reviewed the portfolio on a loan by loan basis and individually evaluated for impairment if any.

For the purpose of calculating portfolio-level reserves, we have grouped our loans into two portfolio segments: Corporate and Personal. The allowance consists of the combination of a quantitative assessment component based on statistical models, a retrospective evaluation of actual loss information to loss forecasts, value of collaterals and could include a qualitative component based on management judgment.

In estimating the probable loss of the loan portfolio, the Company also considers qualitative factors such as current economic conditions and/or events in specific industries and geographical areas, including unemployment levels, trends in real estate values, peer comparisons, and other pertinent factors such as regulatory guidance. Finally, as appropriate, the Company also considers individual borrower circumstances and the condition and fair value of the loan collateral, if any.

In addition, the Company calculates the provision amount as below:

1. General Reserve - is based on total loan receivable balance and to be used to cover unidentified probable loan loss. The management assessed the General Reserve is required  to be no less than 1% of total loan receivable balance.

2. Special Reserve - is fund set aside covering losses due to risks related to a particular country, region, industry, company or type of loans. The reserve rate could be decided based on management estimate of loan collectability. The Loan portfolio did not include any loans outside of the PRC.

While management uses the best information available to make loan loss allowance evaluations, adjustments to the allowance may be necessary based on changes in economic and other conditions or changes in accounting guidance.

The following tables present the activity in the allowance for loan losses and related recorded investment in loans receivable by classes of the loans individually and collectively evaluated for impairment as of and for the three months ended September 30, 2016 and 2015:

	Business Loans (Unaudited)			Personal Loans (Unaudited)			Total (Unaudited)
For the three months ended September 30, 2016
Beginning balance	$	34,326,727		$	20,161,476		$	54,488,203
Charge-offs		-			-			-
Recoveries		(50,612	)		(121,435	)		(172,047	)
Provisions		(360	)		-			(360	)
Foreign exchange impact		(133,237	)		(78,256	)		(211,493	)
Ending balance		34,142,518			19,961,785			54,104,303
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	34,142,518		$	19,961,785		$	54,104,303

	Business Loans (Unaudited)			Personal Loans (Unaudited)			Total (Unaudited)
For the three months ended September 30, 2015
Beginning balance	$	16,598,522		$	9,597,444		$	26,195,966
Charge-offs		(26,341,752	)		(14,792,268	)		(41,134,020	)
Recoveries		-			-			-
Provisions		18,839,288			10,275,122			29,114,410
Ending balance		9,096,058			5,080,298			14,176,356
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	9,096,058		$	5,080,298		$	14,176,356

21

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. ALLOWANCE FOR LOAN LOSSES (CONTINUED)

The following tables present the activity in the allowance for loan losses and related recorded investment in loans receivable by classes of the loans individually and collectively evaluated for impairment as of and for the nine months ended September 30, 2016 and 2015:

	Business Loans (Unaudited)			Personal Loans (Unaudited)			Total (Unaudited)
For the nine months ended September 30, 2016
Beginning balance	$	35,083,738		$	20,511,915		$	55,595,653
Charge-offs					-			-
Recoveries		(127,977	)		(1,155	)		(129,132	)
Provisions		125,729			-			125,729
Foreign exchange impact		(938,972	)		(548,975	)		(1,487,947	)
Ending balance		34,142,518			19,961,785			54,104,303
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	34,142,518		$	19,961,785		$	54,104,303

	Business Loans (Unaudited)			Personal Loans (Unaudited)			Total (Unaudited)
For the nine months ended September 30, 2015
Beginning balance	$	14,836,650		$	9,654,071		$	24,490,721
Charge-offs		(26,341,752	)		(14,792,268	)		(41,134,020	)
Recoveries		-			(56,627	)		(56,627	)
Provisions		20,601,160			10,275,122			30,876,282
Ending balance		9,096,058			5,080,298			14,176,356
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	9,096,058		$	5,080,298		$	14,176,356

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful and loss within the Company's internal risk rating system as of September 30, 2016:

	Pass (Unaudited)		Special Mention (Unaudited)		Substandard (Unaudited)		Doubtful (Unaudited)		Loss (Unaudited)		Total (Unaudited)
Business loans	$	-	$	-	$	-	$	7,540,994	$	30,372,021	$	37,913,015
Personal loans		-		-		-		3,331,075		18,296,248		21,627,323
	$	-	$	-	$	-	$	10,872,069	$	48,668,269	$	59,540,338

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful and loss within the Company's internal risk rating system as of December 31, 2015:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Business loans	$	-	$	-	$	2,618,729	$	6,103,192	$	31,776,892	$	40,498,813
Personal loans		-		-		77,021		3,738,466		18,762,420		22,577,907
	$	-	$	-	$	2,695,750	$	9,841,658	$	50,539,312	$	63,076,720

22

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. LOAN IMPAIRMENT

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for corporate and personal loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. Currently, estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral which approximates to the carrying value due to the short term nature of the loans.

Loans with modified terms are classified as troubled debt restructurings if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a temporary below market rate reduction in interest rate or an extension of a loan’s stated maturity date. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification. Loans classified as troubled debt restructurings are designated as impaired.

Even though the Company allows a one-time loan extension with a period up to the original loan period, which is usually twelve months. Such extension is not considered to be a troubled debt restructuring because the Company does not grant a concession to borrowers. The principal of the loan remains the same and the interest rate is fixed at the current interest rate at the time of extension. Therefore, there were no troubled debt restructurings during the three and nine months ended September 30, 2016 and 2015, respectively.

9. GUARANTEE PAID ON BEHALF OF GUARANTEE CUSTOMERS

	September 30, 2016 (Unaudited)		December 31, 2015
Guarantee paid on behalf of guarantee service customers	$	12,147,982	$	14,031,603
Guarantee paid on behalf of a related party		324,005		622,807
Total	$	12,471,987	$	14,654,410

As of September 30, 2016 and December 31, 2015, guarantee paid on behalf of guarantee service customers represents payment made by the Company to banks on behalf of thirty-three and thirty-two of its guarantee service customers who defaulted on their loan repayments to the banks. Management performs an evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss history, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. As of September 30, 2016 and December 31, 2015, the Company accrued allowance on the balance in “accrual for financial guarantee services” in the value of US$18,309,981 and US$19,322,557, respectively.

10. OTHER ASSETS

Other assets as of September 30, 2016 and December 31, 2015consisted of:

	September 30, 2016 (Unaudited)		December 31, 2015
Other prepaid expense		11,993		30,809
Deposit for court filing fees and legal fees		219,595		222,934
Other receivables		45,815		39,457
	$	277,403	$	293,200

Deposit for court filing fees and legal fees will be claimed from default customers.

23

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. NET INVESTMENT IN DIRECT FINANCING LEASE

On September 25, 2014, PFL entered into a finance lease agreement for the leasing of manufacturing equipment with a total lease receivable of US$2.73 million, with a lease term of 2 years. The lease bears an interest rate of 10.36% per annum.

On October 13, 2014, PFL entered into another finance lease agreement for the leasing of manufacturing equipment with a total lease receivable of US$2.88 million. The lease bears an interest rate of 11.11% per annum.

Future minimum lease receipts under non-cancellable finance lease arrangements are as follows:

	September 30, 2016 (Unaudited)			December 31, 2015
Within 1 year	$	3,674,541		$	3,635,411
2 years		73,461			754,810
3 years		-			-
Total minimum lease receipts		3,748,002			4,390,221
Less: amount representing interest		(298,822	)		(464,100	)
Present value of minimum lease receipts	$	3,449,180		$	3,926,121

Following is a summary of the components of the Company’s net investment in direct financing leases as of September 30, 2016 and December 31, 2015:

	September 30, 2016 (Unaudited)			December 31, 2015
Total minimum lease payments to be received	$	3,748,002		$	4,390,221
Less: Amounts representing estimated executory costs		-			-
Minimum lease payments receivable		3,748,002			4,390,221
Less Allowance for uncollectible		(2,542,163	)		(2,857,554	)
Net minimum lease payments receivable		1,205,839			1,532,667
Estimated residual value of leased property		-			-
Less: Unearned income		(298,822	)		(355,255	)
Net investment in direct financing lease	$	907,017		$	1,177,442

24

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

12. PROPERTY AND EQUIPMENT

The Company’s property and equipment used to conduct day-to-day business are recorded at cost less accumulated depreciation. Depreciation expenses are calculated using straight-line method over the estimated useful life with 5% salvage value below:

Property and equipment consist of the following:

	Useful Life (years)		September 30, 2016 (Unaudited)			December 31, 2015
Furniture and fixtures		5	$	21,665		$	22,260
Vehicles		4		-			153,288
Electronic equipment		3		136,719			140,001
Leasehold improvement		3		297,563			86,418
Less: accumulated depreciation				(335,454	)		(275,847	)
Property and equipment, net			$	120,493		$	126,120

During the nine months ended September 30, 2016, the Company disposed of one vehicle with net book value of US$7,459 (original cost of US$149,186, accumulated depreciation of US$141,727). The Company generated non-interest income of US$48,945 from the disposal.

During the nine months ended September 30, 2015, the Company disposed of two vehicles with net book value of US$4,073 (original cost of US$81,459, accumulated depreciation of $77,386). The Company generated non-interest income of US$14,585 from the disposal.

Depreciation expense totaled US$11,053 and US$27,107 for the three months ended September 30, 2016 and 2015, respectively. Depreciation expense totaled US$43,062 and US$81,245 for the nine months ended September 30, 2016 and 2015, respectively.

13. INTANGIBLE ASSETS

Intangible asset represents the software used for P2P platform, the useful life is estimated at 3 years.

	Useful Life (years)	September 30, 2016 (Unaudited)		December 31, 2015
Software	3	$	969	$	4,435

Amortization expense totaled US$1,115 and US$1,205 for the three months ended September 30, 2016 and 2015, respectively. Amortization expense totaled US$3,393 and US$8,596 for the nine months ended September 30, 2016 and 2015, respectively.

14. SHORT-TERM BANK LOANS

Bank Name	Interest rate	Term		September 30, 2016 (Unaudited)		December 31, 2015
Agricultural Bank Of China	Fixed annual rate of 6.31%		From October 30, 2015 to October 30, 2016		-		2,618,729
				$	-	$	2,618,729

During the nine months ended September 30, 2016, the Company repaid the all outstanding bank borrowings. As of September 30, 2016, the Company did not have bank loans.

As of December 31, 2015, the short-term bank loans have maturity terms within 1 year. These loans were guaranteed by the Wujiang Luxiang Shareholders.

Interest expense incurred on short-term loans for the three months ended September 30, 2016 and 2015 were US$nil and US$152,664, respectively. Interest expense incurred on short-term loans for the nine months ended September 30, 2016 and 2015 were US$30,057 and US$325,830, respectively.

25

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

15. DEPOSITS PAYABLE

Deposits payable are security deposits required from customers in order to obtain loans and guarantees from the Company. The deposits are refundable to the customers when the customers fulfill their obligations under loan and guarantee contracts. 

16. UNEARNED INCOME FROM GUARANTEE SERVICES AND FINANCING LEASE SERVICES

The Company receives guarantee commissions in full at the inception and records unearned income before amortizing it throughout the guarantee service life. Unearned income from guarantee services was US$12,044 and $1,610 as of September 30, 2016 and December 31, 2015, respectively.

The Company receives financing leasing service commissions at the inception and records unearned income before amortizing it throughout the guarantee service life. Unearned income from financing leasing services was US$24,362 and US$59,692 as of September 30, 2016 and December 31, 2015, respectively.

17. OTHER CURRENT LIABILITIES

Other current liabilities as of September 30, 2016 and December 31, 2015 consisted of:

	September 30, 2016 (Unaudited)			December 31, 2015
Accrued payroll	$	30,938		$	85,144
Accrued office rental expenses		52,472			61,617
Other accrued expenses		24,930			-
Other tax (recoverable)/payable		(46,241	)		14,187
Accrued provision for cash settlement against legal proceedings		225,000			-
Other payable		9,960			21,294
	$	297,059		$	182,242

On April 22, 2016, we filed a stipulation and agreement of settlement ("Stipulation") with all persons and entities that purchased or otherwise acquired CCCR shares between August 14, 2013 and July 25, 2014 (collectively "Led Defendants). Pursuant to the Stipulation, CCCR shall cause (a) $225,000 to be transferred to the Escrow Agent within fifteen (15) business days of the later of: (i) the Court’s entry of the Order for Notice and Hearing (or substantially similar order) as set forth in this Stipulation; or (ii) Lead Counsel provision to Settling Defendants’ Counsel of written payment instructions and a completed W-9 form; and (b) Cause CCCR to issue 750,000 shares of freely tradeable shares of CCCR common stock (the “Settlement Stock”) to the Escrow Agent within fifteen (15) business days of the Court’s entry of the Order for Notice and Hearing (or substantially similar order) as set forth in this Stipulation. In the opinion of management, it is highly probable for the Company to settle such a Stipulation. The Company accounted for the cash settlement of $225,000 as an accrued liability and the share settlement of 750,000 shares as an additional paid-in capital.

18. OTHER OPERATING EXPENSE

Other operating expense for the three and nine months ended September 30, 2016 and 2015 consisted of:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Depreciation and amortization	$	12,168	$	27,829	$	46,455	$	89,841
Travel expenses		9,647		1,807		13,134		7,669
Entertainment expenses		42		334		11,970		15,604
Promotion expenses		-		-		-		260
Legal and consulting expenses		1,002,804		164,573		1,642,316		998,094
Car expenses		3,726		12,897		21,541		40,813
Bank charges		540		10,613		2,256		33,011
Audit-related expense		31,382		25,329		100,955		255,779
Provision for settlement against legal proceedings		-		-		690,000		-
Other expenses		25,783		104,712		54,400		251,252
Total	$	1,086,092	$	348,094	$	2,583,027	$	1,692,323

26

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. EMPLOYEE RETIREMENT BENEFIT

The Company has made employee benefit contribution in accordance with relevant Chinese regulations, including retirement insurance, unemployment insurance, medical insurance, housing fund, work injury insurance and maternity insurance. The Company recorded the contribution in the salary and employee charges when incurred. The contributions made by the Company were US$4,532 and US$15,109 for the three months ended September 30, 2016 and 2015, respectively. The contributions made by the Company were US$27,520 and US$52,743 for the nine months ended September 30, 2016 and 2015, respectively.

20. DISTRIBUTION OF PROFIT

The Company did not distribute any dividend to its shareholders for the three and nine months ended September 30, 2016 and 2015, respectively.

21. CAPITAL TRANSACTION

Initial Public Offering

On August 16, 2013, the Company closed an initial public offering (“IPO”) of 1,370,000 shares of Common Stock. On August 26, 2013, the Company sold additional 45,657 shares of Common Stock from the exercise of the overallotment option of shares granted to the underwriters. The public offering price of the shares sold in the IPO was $6.50 per share. The total gross proceeds from the offering were $9.2 million. After deducting underwriting discounts and commissions and offering expenses payable by the Company, the aggregate net proceeds received by the Company totaled approximately $7.6 million.

Upon the consummation of the Company’s IPO on August 16, 2013, the Series A Stock and the Series B Stock (defined below) were automatically converted into shares of Common Stock.

Secondary Public Offering

On May 13, 2014, the Company closed its second public offering (“Follow-on Offering”) of 1,750,000 shares of Common Stock and 1,750,000 warrants to purchase an additional 875,000 shares of Common Stock. The public offering price of the shares was $3.99 per share and the offering pricing for the warrants was $0.01 per warrant. 1,650,386 shares of Common Stock were newly issued by the Company and 99,614 shares of Common Stock were sold by certain selling stockholders. On June 12, 2014, the representative in the Follow-on Offering exercised its over-allotment option to purchase 252,000 warrants to purchase 126,250 shares of Common Stock. The total gross proceeds in the Follow-on Offering and the over-allotment were $6.6 million. After deducting underwriting discounts and commissions and offering expenses payable by the Company and the proceeds to the selling stockholders, the aggregate net proceeds received by the Company totaled approximately $5.7 million.

Common Stock

The Company is authorized to issue up to 100,000,000 shares of Common Stock.

As of December 31, 2015, there were 12,390,062 shares of Common Stock issued and outstanding.

On January 13, 2016, the Company issued 6,000 unregistered shares to John Levy, the Company’s Chairman of Audit Committee, at a market value of US$0.32 per share, in the total amount of US$1,920, for his services provided.

On April 15, 2016, the Company issued 637,592 unregistered shares to Pearlman Schenider LLP, the Company’s legal consultant, at a market value of US$0.58 per share, in the total amount of US$369,803, for the services provided.

On April 27, 2016, the Company issued 15,000, 195,000 and 155,000 unregistered shares to John Levy, the Company’s Chairman of Audit Committee, Jingeng Ling, the Company’s Former Chief Executive Officer, and Long Yi, the Company’s Chief Financial Officer, respectively. The shares were issued at a market value of US$0.58 per share, in the total amount of US$211,700, for the services provided.

On June 8, 2016, the Company closed a private placement to a third party individual investor to issue 2,439,025 common shares, at a per share price of US$0.41, in the total amount of US$1,000,000. This transaction was at arm’s length. The shares shall be authorized for listing on the NASDAQ capital market before closing, and the net proceeds of the sale of the shares shall be used by the Company for working capital and general corporate purpose.

On September 14, 2016, the Company issued 300,000 restricted shares to Shanchun Huang, the designee of Wealth Index Capital Limited, for the consulting services provided. The shares were issued at a market value of US$2.57, in the total amount of $771,000.

As of September 30, 2016, there were 16,137,679 shares of Common Stock issued and outstanding.

27

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

21. CAPITAL TRANSACTION (CONTINUED)

Warrants

The IPO underwriters’ and their affiliates’ received warrants to purchase an aggregate of 95,900 shares of Common Stock, which are exercisable at any time, and from time to time, in whole or in part, during the three-year period from February 10, 2014. The warrants are initially exercisable at a per share price of $6.50.

Warrants to purchase an aggregate of 875,000 shares of Common Stock were issued in the Follow-on Offering on May 13, 2014. The issuance price was $0.01 per warrant, and the warrants are exercisable at any time, and from time to time, in whole or in part, during the three-year period from May 13, 2014. The warrants are initially exercisable at a per share price of $5.60 and are recorded as additional paid-in capital.

Warrants to purchase 252,500 shares of Common Stock were issued to the underwriters in the Follow-on Offering. The warrants have a cashless exercise provision and are exercisable at any time, and from time to time, in whole or in part, during the three-year period from May 13, 2014. The warrants are initially exercisable at a per share price of $4.80 and are recorded as additional paid-in capital.

Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock, of which 1,000,000 shares are designated as Series A Convertible Preferred Stock (the “Series A Stock”) and 5,000,000 shares are designated as Series B Convertible Preferred Stock (the “Series B Stock”).

The Series A Stock ranked (i) prior to the Common Stock and to all other classes and series of equity securities of the Company which by their terms do not rank senior to the Series A Stock, and (ii) junior to any class or series of equity securities which by its terms ranked senior to the Series A Stock. The Series A Stocks was subordinate to and ranked junior to all indebtedness of the Company. Each share of the Series A Stock was on the day on which the Company consummated its IPO, automatically and without any action on the part of the holder thereof converted into issued and outstanding shares of Common Stock beneficially owned by a consultant who received the shares on December 19, 2011. The number of shares of Common Stock issued upon conversion of the Series A Stock was equal to the purchase price of the Series A Stock divided by a per share conversion price of 50% of the price of a share of Common Stock in the IPO. No new shares were issued by the Company at the conversion. In addition, the holders were not permitted to convert their preferred stock prior to consummation of the IPO.

The Series B Preferred Stock ranked (i) prior to the Common Stock and to all other classes and series of equity securities of the Company which by their terms do not rank senior to the Series B Preferred Stock and (ii) junior to any class or series of equity securities which by its terms ranked senior to the Series B Preferred Stock. The Series B Stock was subordinate to and ranked junior to all indebtedness of the Company. Each share of the Series B Stock was on the day on which the Company consummated its IPO, automatically and without any action on the part of the holder thereof converted into issued and outstanding shares of Common Stock beneficially owned by a consultant who received the shares on December 19, 2011. The number of shares of Common Stock issued upon conversion of the Series B Stock was equal to the purchase price of the Series B Stock divided by a per share conversion price of 25% of the price of a share of Common Stock in the IPO. No new shares were issued by the Company at the conversion. In addition, the holders were not permitted to convert their preferred stock prior to consummation of the IPO.

Between January 1, 2012 and April 1, 2013, the Company issued a total of 745 shares of Series A Stock to an aggregate of 11 investors pursuant to certain subscription agreements. We received gross proceeds of $372,500 and incurred costs associated with this private placement of $93,125.

Between October 12, 2012 and May 8, 2013, the Company issued a total of 760 shares of Series B Stock to an aggregate of 44 investors pursuant to certain subscription agreements. We received gross proceeds of $380,000 and incurred costs associated with this private placement of $95,000.

On August 16, 2013 when the Company closed its IPO, all outstanding shares of the Series A Stock and Series B Stock were converted into an aggregate of 348,462 shares of already issued and outstanding Common Stock beneficially owned by a consultant who received our shares on December 19, 2011, automatically and without any action on the part of the holder thereof. The per share conversion price of Series A Stock and Series B Stock was equal to $3.25 and $1.63, respectively.

The discount on the Series A and B Stock was accounted for as a beneficial conversion feature upon conversion. The total amount of discount was $752,500, which was accounted for as a reduction to retained earnings and an offsetting increase to additional paid in capital in the Company's financial statements.

22. STATUTORY RESERVE

In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide statutory reserve, which is appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. The Company allocates 15% of its annual after-tax profit to the statutory reserve. The statutory reserve can only be used for specific purposes and are not distributable as cash dividends. WFOE was established as a foreign-invested enterprise and, therefore, is subject to the above mandated restrictions on distributable profits. For the three and nine months ended September 30, 2016 and 2015, the Company did not accrue the statutory reserve due to net loss.

28

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. LOSS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2016 and 2015, respectively:

	For The Three Months Ended						For The Nine Months Ended
	September 30,						September 30,
	2016 (Unaudited)			2015 (Unaudited)			2016 (Unaudited)			2015 (Unaudited)
Net loss attributable to the common shareholders	$	(624,445	)	$	(37,101,946	)	$	(1,206,116	)	$	(40,629,513	)
Basic weighted-average common shares outstanding		15,889,853			12,390,062			14,026,815			12,330,721
Effect of dilutive securities		-			-			-			-
Diluted weighted-average common shares outstanding		15,889,853			12,390,062			14,026,815			12,330,721
Loss  per share:
Basic	$	(0.039	)	$	(2.994	)	$	(0.086	)	$	(3.295	)
Diluted	$	(0.039	)	$	(2.994	)	$	(0.086	)	$	(3.295	)

Basic loss per share are computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share were the same as basic loss per share due to the lack of dilutive items in the Company for the three and nine months ended September 30, 2016 and 2015. The number of warrants is omitted from the computation as the anti-dilutive effect.

24. INCOME TAXES AND TAX PAYABLE

Effective January 1, 2008, the New Taxation Law of PRC stipulates that domestically owned enterprises and foreign invested enterprises (the “FIEs”) are subject to a uniform tax rate of 25%. While the New Tax Law equalizes the tax rates for FIEs and domestically owned enterprises, preferential tax treatment may continue to be given to companies in certain encouraged sectors and to entities classified as high-technology companies, regardless of whether these are domestically-owned enterprises or FIEs. In November 2009, the Jiangsu Province Government issued Su Zheng Ban Fa [2009] No. 132 which stipulates that micro-credit companies in Jiangsu Province is subject to preferential tax rate of 12.5%. As a result, the Company is subject to the preferential tax rate of 12.5% for its loan business for the periods presented. The taxation practice implemented by the tax authority governing the Company is that the Company pays enterprise income taxes at rate of 25% on a quarterly basis, and upon annual tax settlement done by the Company and the tax authority in five (5) months after December 31 the tax authority will refund the Company the excess enterprise income taxes it paid beyond the rate of 12.5%. However since 2015, the excess enterprise income taxes paid will not be refunded but can be used to offset the future income tax payable arising from taxable income.

The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the three and nine months ended September 30, 2016 and 2015, the Company had no unrecognized tax benefits. For the nine months ended September 30, 2016, the Company made net tax operating profit from its PRC subsidiaries and its consolidated VIE of US$422,684. As of September 30, 2016, the Company has carry-forward tax operating losses from its PRC subsidiaries and its consolidated VIE of US$61,463,690, which will expire from the year ending December 31, 2019 to 2021. The Company recognized deferred income tax assets of US$11,739,850 as of September 30, 2016. However, the Company estimates there will be no sufficient net income before income tax from years ending December 31, 2016 to 2021 to realize the deferred income tax assets. The Company provided valuation allowance for deferred income tax assets of US$11,739,850 as of September 30, 2016.

The Company does not anticipate any significant increase to its liability for unrecognized tax benefit within the next 12 months. The Company will classify interest and penalties related to income tax matters, if any, in income tax expense.

29

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

24. INCOME TAXES AND TAX PAYABLE (CONTINUED)

Income tax payable is comprised of:

	September 30, 2016 (Unaudited)		December 31, 2015
Income tax payable	$	162,206	$	126,485

Income tax expense for the nine months ended September 30, 2016 and 2015 is comprised of:

	For the three months ended					For the nine months ended
	September 30,					September 30,
		2016 (Unaudited)		2015 (Unaudited)			2016 (Unaudited)		2015 (Unaudited)
Current income tax (credit)/expense	$	-	$	(53,999	)	$	-	$	7,508
Deferred income tax (credit)/expense		-		(4,610	)		-		587,142
Total provision for income taxes	$	-	$	(58,609	)	$	-	$	594,650

The effective tax rates for the nine months ended September 30, 2016 and 2015 are 0% and 1.49%, respectively.

Deferred tax liability arises from government incentive for the purpose of covering the Company’s actual loan losses and ruled that the income tax will be imposed on the subsidy if the purpose is not fulfilled within 5 years after the Company receives the subsidy. As of September 30, 2016 and December 31, 2015, subsidy of US$1,010,391 and US$1,011,877 did not fulfill the purpose within due date and the related deferred tax liability was transferred to income tax payable. As of September 30, 2016 and December 31, 2015, the deferred tax liability amounted to US$158,980 and US$204,266, respectively.

As of September 30, 2016 and December 31, 2015, the Company intends to permanently reinvest the undistributed earnings from its foreign subsidiaries to fund future operations. The amount of unrecognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries is not determined because such a determination is not practicable.

30

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

25. RELATED PARTY TRANSACTIONS AND BALANCES

1) Nature of relationships with related parties

Name	Relationship with the Company
Wujiang Chunjia Textile Trading Co., Ltd (“Chunjia Textile”)	Controlled by Huichun Qin
Suzhou Rongshengda Investment Holding Co., Ltd.	Controlled by shareholders of Wujiang Luxiang
Suzhou Dingli Real Estate Co., Ltd.	Controlled by Former Chief Executive Officer
Huichun Qin	Non-controlling shareholder and former CEO and chairman of board of directors

2) Related party transactions

During the nine months ended September 30, 2016, Suzhou Dingli Real Estate Co., Ltd., a company controlled by Mr. Jingen Ling, the Former Chief Executive Officer was involved to provide guarantee services for the bank borrowings. No commissions or fees are required from the Company. Before September 30, 2016, all outstanding bank borrowings have been repaid.

During the nine months ended September 30, 2016, the Company made a loan of US$1,945,224  to Suzhou Rongshengda Investment Holding Co., Ltd., a company controlled by shareholders of Wujiang Luxiang. The loan was agreed to return by November 30, 2016. Due to the short-term borrowing, the Company did not charge any interest or fees. As of September 30, the balance is still outstanding.

3) Related party balances

Amount due from related parties were as follows:

	September 30, 2016 (Unaudited)		December 31, 2015
Suzhou Rongshengda Investment Holding Co., Ltd.	$	1,918,977	$	-
Chunjia Textile		324,005		622,807
Huichun Qin	$	1,049,441	$	1,078,300

As of September 30, 2016, the Company provided financial guarantee service for Chunjia Textile to guarantee loans of US$324,005. The Company accrued provision of US$162,002 on the outstanding balance as of September 30, 2016.

Huichun Qin transferred $1,098,197(equivalent of RMB 7 million) to his personal account without proper authorization on July 2, 2014. As of September 30, 2016, Huichun Qin has not repaid the balance. The amount was recorded as a deduction of the Company’s equity as of September 30, 2016 and December 31, 2015, respectively.

31

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

26. COMMITMENTS AND CONTINGENCIES

1) Lease Commitments

During the year ended December 31, 2015, the Company leased its new office under a lease agreement from June 1, 2015 to May 31, 2021. As a result, in October 2015, the Company terminated the lease agreement for its former principal office which agreement was to expire on September 30, 2018. No default penalty was paid for the earlier termination. The following table sets forth the Company’s contractual obligations as of September 30, 2016 in future periods:

	Rental payments (Unaudited)
Year ending September 30, 2017		59,968
Year ending September 30, 2018		71,962
Year ending September 30, 2019		71,962
Year ending September 30, 2020		71,962
Year ending September 30, 2021		47,975
Total	$	323,829

2) Guarantee Commitments

The guarantees will terminate upon payment and/or cancellation of the obligation; however, payments by the Company would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee. Generally, the average guarantee expiration terms ranged within 12 to 24 months and the average percentage of the guarantee amount as security deposit is 10% ~ 20% . As of September 30, 2016 and December 31, 2015, the loan amount guaranteed by the Company was US$11,341,455 and US$11,653,342, respectively, for its financial guarantee service customers.

32

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

26. COMMITMENTS AND CONTINGENCIES (CONTINUED)

3) Contingencies

The Company is involved in various legal actions arising in the ordinary course of its business. During nine months ended September 30, 2016, the Company was involved in 123 lawsuits, among which 85 were related to its loan business and 38 were related to guarantee business. The Company initiated legal proceedings to collect delinquent balances from borrowers and guarantees. 88 of these cases with an aggregated claim of USD 42.14 million have been adjudicated by the Court in favor of the Company and these cases are settled or in the process of enforcement. The remaining 35 cases with an aggregated claim of USD 29 million have not been adjudicated by the Court as of September 30, 2016.

On August 6, 2014, a purported shareholder Andrew Dennison filed a putative class action complaint in the United States District Court District of New Jersey (the “N.J. district court”) relating to a July 25, 2014 press release about the Company’s progress in recovering a significant portion of the $5.4 million the Company paid in the first quarter of 2014 on behalf of loan guarantee customers. The action, Andrew Dennison v. China Commercial Credit, Inc., et al., Case No. 2:2014-cv-04956, alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Xiangdong Xiao, and John F. Levy violated the federal securities laws by misrepresenting in prior public filings certain material facts about the risks associated with its loan guarantee business. On October 2, 2014, purported shareholders Zhang Yun and Sanjiv Mehrotra (the “Yun Group”) asserted substantially similar claims against the same defendants in a putative class action captioned Zhang Yun v. China Commercial Credit, Inc., et al., Case No. 2:14-cv-06136 (D. N.J.). Neither complaint states the amount of damages sought.

On or about October 6, 2014, Dennison, the Yun Group and another purported shareholder, Jason Stark, filed motions to consolidate the cases, be appointed as lead plaintiff and to have their respective counsel appointed as lead counsel. On October 31, 2014, the N.J. district court entered an order consolidating the cases under the caption “In re China Commercial Credit Inc. Securities Litigation” and appointing the Yun Group as lead plaintiff (“Class Plaintiff”) and the Yun Group’s counsel as lead counsel.

On November 18, 2014, the Yun Group and the Company, which at that point was the only defendant served, entered into a stipulation to transfer of the case to the Southern District of New York. On December 18, 2014, Mr. Levy, who had by then been served, joined in the stipulation. On December 29, 2014, the N.J. district court entered an order transferring the action. The transfer was effected on January 22, 2015, and assigned docket number 1:15-cv-00557-ALC (S.D.N.Y.).

Under the schedule stipulated by the parties, the Yun Group was to file an amended complaint within 60 days of the date that the transfer was effected, and the defendants’ date to answer or move was within 60 days of that filing. On April 7, 2015, the Class Plaintiff filed a Second Amended Class Action Complaint (the “CAC”). The CAC also asserts securities law claims against defendants Axiom Capital Management, Inc., Burnham Securities Inc. and ViewTrade Securities, Inc. (collectively, the “Underwriter Defendants”). The CAC alleges that the Company engaged in a fraudulent scheme by engaging in undisclosed and improper lending practices and made misleading representations regarding its underwriting policies, the loan portfolio quality, the loan loss allowance, compliance with U.S. GAAP and its internal control systems.

In accordance with the Court’s procedures, the Company and Mr. Levy and the Underwriter Defendants requested a Pre-Motion Conference in anticipation of filing a motion to dismiss the CAC, which was held on June 25, 2015. At the conference, the Court adjourned the date to answer or move in order to provide the Class Plaintiff with time to serve certain overseas defendants. After the conference, the Class Plaintiff voluntarily dismissed Jianming Yin, Jinggen Ling and Xiangdong Xiao from the action, and Long Yi agreed to waive service, which left Huichun Qin as the sole remaining defendant to serve. The case remains stayed pending service of Huichun Qin.

Two of the Underwriter Defendants, Axiom Capital Management, Inc., and ViewTrade Securities, Inc., have asserted their respective rights to indemnification under the Underwriting Agreements entered into in connection with the Company’s initial public offering and secondary offering. On or about March 16, 2016, CCCR entered into an Advance Funding and Escrow Agreement, under which the CCCR agreed to deposit shares into escrow to fund the advancement obligation, with the initial deposit to be shares valued at Two Hundred Thousand Dollars ($200,000), based upon 80% of the 30 day volume weighted average Trading Price ("VWAP") for each of the 30 consecutive trading days prior to the date of the Agreement.

33

CHINA COMMERCIAL CREDIT, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

26. COMMITMENTS AND CONTINGENCIES (CONTINUED)

3) Contingencies (continued)

On February 3, 2015, a purported shareholder Kiram Kodali filed a putative shareholder derivative complaint in the United States District Court for the Southern District of New York, captioned Kiran Kodali v. Huichun Qin, et al., Case No. 15-cv-806. The action alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Chunfang Shen, John F. Levy, Xiaofang Shen and Chunjiang Yu violated their fiduciary duties, grossly mismanaged the Company and were unjustly enriched based upon the transfer that was the subject of the Internal Review and other grounds substantially similar to those asserted in the class action complaints. Kodali did not serve a demand upon the Company and alleges that demand is excused. The Company and Mr. Levy have been served. An amended derivative complaint was filed on April 20, 2015. On May 29, 2015, the Court “so ordered” a stipulation among Kodali, the Company and Mr. Levy staying all proceedings in the derivative case except for service of process on individual defendants until the earlier of thirty days of termination of the stipulation, dismissal of the class action with prejudice or the date any of the defendants in the class action file an answer to the CAC. The Company believes that this lawsuit is without merit and intends to vigorously defend against it. At this stage of the proceedings, the Company is not able to estimate the probability of success or loss.

On May 18, 2015, WFOE filed a civil complaint against Huichun Qin with the Wujiang Region Suzhou City People’s Court claiming Mr. Qin’s misappropriation of RMB 7 million in July 2014. The complaint was rejected due to a procedural issue. The Company has since learned that Mr. Qin has been convicted and sentenced to a term of incarceration of approximately five years. In view of this information, the Company is evaluating its strategic options.

27. SUBSEQUENT EVENT

1) Receipt of NASDAQ Deficiency Notice

On November 4, 2016, the Company received a written notice from The Nasdaq Stock Market (“Nasdaq”) stating that the Company is no longer in compliance with the minimum Market Value of Listed Securities requirement for continued listing on the Nasdaq Capital Market. Nasdaq 5550(b)(2) requires listed companies to maintain a minimum Market Value of Listed Securities of at least $35 million. Further, as of November 4, 2016, the Company did not meet the alternative compliance standards under Nasdaq Listing Rule 5550(b) of (i) net income from continuing operations of $500,000 in its last completed fiscal year or in two of the last three fiscal years, or (ii) stockholders' equity of at least $2.5 million.

The notification letter has no immediate effect on the Company’s listing on the Nasdaq Capital Market. Nasdaq provided the Company a compliance period of 180 calendar days, or until May 3, 2017, to regain compliance. The Company intends to promptly evaluate options available to regain compliance and to timely submit a plan to regain compliance with Nasdaq’s minimum stockholders’ equity standard. There can be no assurance that the Company’s plan will be accepted or that, if it is, the Company will be able to regain compliance with the applicable Nasdaq listing requirements.

2) Charged-off loans

During the period from October 1, 2016 to the date of this report, the Company assessed the charged-off loan and guarantee balances recorded as of September 30, 2016 and was of the opinion that these balances were uncollectible. In addition, the Company assessed the remaining balances of loan receivable and financial guarantee and was of the opinion that it was not necessary to charge-off these balances.

34

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a financial services firm operating in China. Our current operations are mainly conducted through Wujiang Luxiang, a fully licensed microcredit company which we control through our subsidiaries and certain contractual arrangement, and consist of providing short-term direct loans and loan guarantees to small and medium enterprises (“SME”s) located in Wujiang City, Jiangsu Province of China. As of September 30, 2016, we have built a USUS$59.5 million portfolio of direct loans to 108 borrowers and a total of USUS$11.3 million in loan guarantees for 14 borrowers. We were established under the 2008 Guidance on the Small Loan Company Pilot of the China Banking Regulatory Commission and the People's Bank of China (“PBOC”) (No.23) (“Circular No. 23”) to extend short term loans and loan guarantees to SMEs, a class of borrowers that we believe have been underserved in the Chinese lending market. The loans that we provide bridge the gap between Chinese-state run banks that have not traditionally served the capital needs of SMEs and high interest rate “underground” lenders, and our loans provide capital at more favorable terms and sustainable interest rates.

As the rate of fees and commissions generated from the guarantee business has been decreasing, the Company has decided that the revenue does not justify the default risks involved, and therefore expects to further reduce the traditional guarantee business and hold off on pursuing the guarantee business to be provided via the Kaixindai Financing Services Jiangsu Co. Ltd (“Kaixindai”) platform as previously planned. Management may actively resume the guarantee business if economic conditions improve in the future.

On September 5, 2013, our wholly owned subsidiary, CCC International Investment Holding Ltd. (“CCC HK”), established Pride Financial Leasing (Suzhou) Co. Ltd. (“PFL”) in Jiangsu Province, China. PFL was expected to offer financial leasing of machinery and equipment, transportation vehicles, and medical devices to municipal government agencies, hospitals and SMEs in Jiangsu Province and beyond. As of the date of this quarterly report, PFL entered into two financial leasing agreements for an aggregate lease receivable of US$5.51 million (one with a monthly principle and interest income approximating US$81,600 for the period during November 13, 2014 to May 12, 2015, and approximating US$80,000 for the period from May 13, 2015 and thereafter, and the other with a quarterly principle and interest income approximating US$342,800). We do not currently have further funds to deploy in the financial leasing business.

Key Factors Affecting Our Results of Operation

Our business and operating results are affected by China’s overall economic growth, local, economic condition, market interest rate and the borrowers repayment ability. Unfavorable changes could affect the demand for the services that we provide and could materially and adversely affect our results of operations. Our results of operations are also affected by the regulations and industry policies related to the microcredit industry in the PRC.

Our results of operations are also affected by the provision for loan losses and provision for financial guarantee loss which are noncash items and represents an assessment of the risk of future loan losses. Increases in the allowance for loan losses are achieved through provision for loan losses that are charged against net interest income.

Although we have generally benefited from China’s economic growth and the policies to encourage lending to farmers and SMEs, we are also affected by the complexity, uncertainties and changes in the PRC regulations governing the micro lending industry. Due to PRC legal restrictions on foreign equity ownership of and investment in the micro lending sector in China, we rely on contractual arrangements with Wujiang Luxiang, and its shareholders to conduct most of our current business in China. We face risks associated with our control over our variable interest entity, as our control is based upon contractual arrangements rather than equity ownership.

35

Results of Operations

Three Months Ended September 30, 2016 as Compared to Three Months Ended September 30, 2015

	For the Three Months Ended September 30,						Change
	2016			2015			Amount			%
	(Unaudited)			(Unaudited)
Interest income
Interests and fees on loans and direct financing lease	$	722,117		$	156,498			565,619			361	%
Interests on deposits with banks		263			7,054			(6,791	)		-96	%
Total interest and fee income		722,380			163,552			558,828			342	%
Interest expense
Interest expense on short-term bank loans		-			(96,880	)		96,880			-100	%
Net interest income		722,380			66,672			655,708			983	%
Reversal of provision /(Provision) for loan losses		226,694			(29,210,186	)		29,436,880			-101	%
Reversal of provision /(Provision) for direct financing lease losses		242,180			(163,922	)		406,102			-248	%
Net interest income /(loss) after provision for loan losses and financing lease losses		1,191,254			(29,307,436	)		30,498,690			104	%
Commissions and fees on financial guarantee services		9,117			24,565			(15,448	)		-63	%
Provision for financial guarantee services		(599,808	)		(7,322,936	)		6,723,128			-92	%
Commission and fee loss on guarantee services, net		(590,691	)		(7,298,371	)		6,707,680			-92	%
Net Revenue/(Loss)		600,563			(36,605,807	)		37,206,370			-102	%
Non-interest income
Other non-interest income		-			19,439			(19,439	)		-100	%
Total non-interest income		-			19,439			(19,439	)		-100	%
Non-interest expense
Salaries and employee surcharge		(120,130	)		(131,778	)		11,648			-9	%
Rental expenses		(28,132	)		(83,501	)		55,369			-66	%
Business taxes and surcharge		9,617			(12,008	)		21,625			-180	%
Other operating expenses		(1,086,092	)		(348,094	)		(737,998	)		212	%
Total non-interest expense		(1,224,737	)		(575,381	)		(649,356	)		113	%
Foreign exchange (loss)/gain		(271	)		1,194			(1,465	)		-123	%
Loss Before Income Taxes		(624,445	)		(37,160,555	)		36,536,110			-98	%
Income tax expense		-			58,609			(58,609	)		-100	%
Net Loss		(624,445	)		(37,101,946	)		36,477,501			-98	%
Loss per Share- Basic and Diluted		(0.039	)		(2.994	)		2.955			-99	%
Weighted Average Shares Outstanding-Basic and Diluted		15,889,853			12,390,062			3,499,791			28	%
Net Loss		(624,445	)		(37,101,946	)		36,477,501			-98	%
Other comprehensive income/(loss)
Foreign currency translation adjustment		260,803			(1,352,337	)		1,613,140			-119	%
Comprehensive Loss	$	(363,642	)	$	(38,454,283	)		38,090,641			99	%

36

The Company’s net loss for the three months ended September 30, 2016 was US$624,445, representing a decrease of US$36,477,501 or 98%, from net loss of US$37,101,946 for the three months ended September 30, 2015. The decrease in net loss for the three months ended September 30, 2016 was the net effect of the changes in the following components:

● an increase in net interest income of US$655,708;

● a change in the provision for loan losses of US$29,436,880 from a provision of US$29,210,186 for the three months ended September 30, 2015 to a reversal of provision of US$226,694 for the three months ended September 30, 2016;

● a change in the provision for direct financing lease losses of US$406,102 from a provision of US$163,922 for the three months ended September 30, 2015 to a reversal of provision of US$242,180 for the three months ended September 30, 2016;

● a decrease of provision for financial guarantee services of US$6,723,128;

● an increase in total non-interest expense of US$649,356; and

● a decrease in income tax expense of US$58,609;

The following paragraphs discuss changes in the components of net loss in greater details during the three months ended September 30, 2016, as compared to the three months ended September 30, 2015.

Net Interest Income

Net interest income is equal to interest income we generated less interest expenses on short-term bank loans we incurred. The Company’s net interest income increased by US$655,708, or 983% to US$722,380 during the three months ended September 30, 2016, as compared to net interest income of US$66,672 during the three months ended September 30, 2015.

The interests and fees on loans, direct financing leases and deposits with banks increased by US$558,828, or 342% from US$163,552 for the three months ended September 30, 2015 to US$722,380 for the three months ended September 30, 2016. The increase is mainly caused by increased collection of interest income from long-aged loan customers as a result of continuous collection by the Company.

As a traditional industry, the textile industry, which is the pillar industry in Wujiang area, as well as other industries, have been facing downward pressure. Additionally, the bank lenders usually require an old loan be paid in full upon maturity before they approve a new loan to the same borrower. Some SMEs have to borrow from so-called “underground” lenders, or shadow banks to repay the loans due to the banks. Additionally, the banks denied to extend new loans to some SMEs even after they made the full repayment for the loans due and satisfied other conditions. Management is concerned that the borrowers may use the proceeds from the loans we grant to them as a means of repayment to the other banks or even to the underground lenders, instead of using them in operations. Therefore, management decided to grant new loans in a more cautious manner. During the three months ended September 30, 2016 and 2015, we did not grant or renew any loans. As of September 30, 2016, we had 108 loans with an average loan size of US$551,230.

Due to the long-term nature of our restricted deposits with third party banks, we utilized these deposits as term deposits which in turn generated interest income on deposits with banks of US$263 during the three months ended September 30, 2016 as compared to US$7,054 during the three months ended September 30, 2015. Caused by the contraction of our traditional guarantee business with banks, we have closed several restricted deposit accounts with banks through which we provided guarantee services to our customers. As a result, the interest income on deposits with bank was insignificant during the three months ended September 30, 2016 and 2015, respectively.

Interest expense represents interest incurred on short-term bank loans. During the three months ended September 30, 2016, the interest expense related to the loans from banks was US$nil as compared to US$96,880 for the same period last year. The interest expense incurred on short-term bank loans decreased by US$96,880, or 100%. This was mainly caused by repayment of all bank loans before March 2016, leading to a decrease of total bank borrowing balance by US$2.6 million from US$2.6 million as of December 31, 2015 to US$nil as of September 30, 2016.

37

Provision for Loan Losses

The Company’s provision for loan losses changed from a provision of US$29,210,186 for the three months ended September 30, 2015 to a reversal of provision of US$226,694 for the three months ended September 30, 2016. The provision for loan losses was determined by comparing the beginning and ending balance of allowance for loan losses for business and personal loans. If the ending balance of the allowance of loan losses after any charge offs (net of recoveries) is less than the beginning balance, it will be recorded as a “reversal”; if it is larger, it will be recorded as a “provision” in the allowance for loan loss. The netting amount of “reversal” and “provision” is presented in the consolidated statements of income and comprehensive income and the components of the provision for loan losses were disclosed in Note 7 of financial statements.

The change of provision for loan losses of US$29,436,880, or 101% for the three months ended September 30, 2016, as compared to the same period last year, is mainly due to the fact that the management charged off loan losses of US$41,134,020 during the three months ended September 30, 2015, leading to far more significant accrual of provision on loan losses during the three months ended September 30, 2015 as compared to the same period of 2016.

Since the beginning of 2014, the economic conditions in the eastern part of China, especially the Yangtze River Delta region, has been challenging due to the downturn of the general economic situation in China. Wujiang, which is in the heart of this region, has been significantly affected. The textile industry, which is the pillar industry in the Wujiang area, as well as other industries, has been facing downward pressure. As the local SMEs’ profitability and repayment ability deteriorates, “doubtful” and “loss” bank loans drastically increased. As such, our provision for loan losses substantially increased since 2014 and we had a significant allowance balance for loan losses as of September 30, 2016 and December 31, 2015.

In February and March 2015, the Company reviewed the classification of its loan portfolios within its rating system to test the adequacy of the allowances calculated thereby. As a result of such testing, the Company decided to reclassify certain loans into different categories. The Company reviewed the profile, financial condition and other relevant information and documents of each customer in the lending businesses. For customers with several loans with different due dates, if one of whose loans was past due, the Company decided to reclassify all loans of the customer's as past due (even the other loans that were not mature yet). For extended loans, the Company re-evaluated the customer's repayment ability in a more cautions manner and reclassified the loans of customers without very strong financial condition into the past due category. These reclassifications affected numerous customer accounts.

During the year ended December 31, 2015, management continued to assess the adequacy of the allowances in a cautious manner. Management assessed the collectability of loan receivable balances on an individual basis and concluded the collection from certain borrowers is remote. Therefore, management determined to charge off loan balances against allowances, in the amount of US$6.0 million, as these loans are deemed as uncollectible. Management concluded that these borrowers had neither ability nor intention to make repayment as (1) these charged loans are guarantee backed loans which are subordinated to asset backed loans these borrowers obtained from the banks, (2) most of our borrowers or their guarantors are in the textile industry and the majority of the textile businesses are struggling due to the continued and worsened downturn trend in China’s macro-economic environment during the third quarter of fiscal year 2015 and quite a number of textile businesses went bankrupt and (3) management was advised by local counsels representing the Company in the collection lawsuits that the chances of collection is quite remote given the large scale defaults in both large and small businesses in Wujiang region. During the three months ended September 30, 2016, the Company assessed the charged-off loan balances recorded as of September 30, 2016 and was of the opinion that these balances were uncollectible.

38

Net Commission and Fee on Guarantee Business

The Company also generated net income by charging fees for financial guarantee services provided to our customers to help them obtain loans from other banks. We generally charge a one-time fee of 1.8% - 3.6% multiplied by the amount of loans being guaranteed, based on the nature of the guarantee and whether the customer is new or existing.

As of September 30, 2016, the off-balance-sheet financial guarantee amounted to US$11.3 million. The commissions and fees generated from our financial guarantee services decreased from US$24,565 for the three months ended September 30, 2015 to US$9,117 for the three months ended September 30, 2016, representing a decrease of US$15,448, or 63%. The reduction was due to the decreased number of guarantee transactions as management reduced the guarantee portfolio to control the default risk.

As of September 30, 2016, we have provided guarantees for a total of US$11.3 million underlying loans to approximately 14 financial guarantee service customers, as compared to a total of US$11.6 million as of December 31, 2015.

Provision on Financial Guarantee Services

The provision on financial guarantee services decreased from US$7,322,936 for the three months ended September 30, 2015, to a provision of US$599,808 for the three months ended September 30, 2016, representing a decrease of US$6,723,128, or 92%. The change was mainly attributable to the repayment of US$1.83 million from several financial guarantee customers who were classified as “loss customers” or “doubtful customers” as of December 31, 2015.

The methodology the Company used to estimate the liability for probable guarantee loss considers the guarantee contract amount and a variety of factors, which include, dependence on the counterparty, latest financial position and performance of the customers, actual defaults, estimated future defaults, historical loss experience, estimated value of collaterals or guarantees the costumers or third parties offered, and other economic conditions such as the economic trend of the area and the country. The estimates are based upon currently available information. Based on the recent lawsuit results and repayment status by defaulted customers, the Company estimated approximately 50% of off-balance-sheet financial guarantee services may be subject to default and their repayment may be “not likely”. As of September 30, 2016 and December 31, 2015, the Company accrued approximately 50% of contract amount as compared to 1% of contract amount.

We accrued specific provision on the balance of repayment on behalf of defaulted customers according to “Five-Tier” principal. The Specific Reserve is based on the level of loss of each loan after categorizing the loan according to their risk. According to the “Five-Tier Principle” set forth in the Provision Guidance, the guarantees are categorized as “special-mention”, “substandard”, “doubtful” or “loss”. Normally, the provision rate is 2% for “special-mention”, 25% for “substandard”, 50% for “doubtful” and 100% for “loss”.

Since the beginning of 2016, People’s Bank of China injected a significant amount of liquidity to the market to encourage the development of emerging industries such as online-game, filming and virtual reality, which has made it easier than previous two years for entities to gain access to capital. However, the bank lenders are still cautious with SMEs in traditional industries. The bank lenders usually require an old loan be paid in full upon maturity before they approve a new loan to the same borrower. Since the ended of the year ended December 31, 2014, the banks denied to extend new loans to many SMEs even after they made the full repayment for the loans due and satisfied other conditions. As a result, some of the SME borrowers for which we provided the guarantees decided to default on the bank loans. Therefore the amount of repayment we made to the bank lenders substantially increased since the year ended December 31, 2014. We have brought collection actions against both the borrowers and their counter-guarantors. However, management was advised by counsel in the collection action that the chance of collection is remote given the large scale bad debt prevalent in Wujiang region. During the three months ended September 30, 2016, we did not charge off guarantee paid on behalf of customers

39

In February and March 2015, the Company revisited the classification of its guarantee portfolios within its rating system to test the adequacy of the allowances calculated thereby. As a result of such testing, the Company decided to reclassify certain guarantees into different categories. The Company reviewed the profile, financial condition and other relevant information and documents of each customer in the guarantee businesses. For customers with several guarantees with different due dates, if one guaranteed loan was past due, the Company decided to reclassify all of this customer's guaranteed loans as past due (even the other loans that were not mature yet). These reclassifications affected numerous customer accounts. We engaged He-Partners Law Firm, one of the largest law firms in Suzhou City, to represent us in the legal proceedings against the borrowers and their counter guarantors, and expect to collect part of the outstanding balance in a period ranging from six twelve months to one and a half year upon adjudication by the court in favor of the Company. The timing of collection and ultimate amount of funds we can recover depend on a few factors, including the repayment ability of the borrower and their counter-guarantors, the execution time of the court, other obligations the borrowers have and priority over the claim for the Company.

Non-interest Expenses

Non-interest expenses increased from US$575,381 for the three months ended September 30, 2015 to US$1,224,737 for the three months ended September 30, 2016, representing an increase of US$649,356 or 113%. Non-interest expenses primarily consisted of salary and employee surcharge, office rental expense, business tax and surcharge, depreciation of equipment, travel expenses, entertainment expenses, professional service fees, and other office supplies. The increase was mainly attributable to net effects of a decrease of salaries and employee surcharge by US$11,648, or 9%, a decrease of rental expenses by US$55,369, or 66%against an increase of other operating expenses by US$737,998, or 212%. Other operating expenses were 212% higher during the three months ended September 30, 2016 as compared to the three months ended September 30, 2015, primarily due to, an increase of consulting expenses of US$771,000 by issuing 300,000 restricted shares at a market price of US$2.57, to a financial service provider who was involved to assist the Company to find out a new business model and increase profitability.

Income Tax

Income tax expenses decreased from US$58,609 for three months ended September 30, 2015 to nil for three months ended September 30, 2016. The decrease in income tax is mainly attributable to the net operating loss carry forward from December 31, 2015, and also net operating loss was incurred during the three months ended September 30, 2016. As a result, nil income tax expenses were accrued during the three months ended September 30, 2016.

40

Results of Operation

Nine Months Ended September 30, 2016 as Compared to Nine Months Ended September 30, 2015

	For the Nine Months Ended September 30,						Change
	2016			2015			Amount			%
	(Unaudited)			(Unaudited)
Interest income
Interests and fees on loans and direct financing lease	$	1,203,663		$	2,345,493			(1,141,830	)		-49	%
Interests on deposits with banks		3,526			15,378			(11,852	)		-77	%
Total interest and fee income		1,207,189			2,360,871			(1,153,682	)		-49	%
Interest expense					-
Interest expense on short-term bank loans		(30,057	)		(422,710	)		392,653			-93	%
Net interest income		1,177,132			1,938,161			(761,029	)		-39	%
Reversal of provision /(Provision) for loan losses		133,177			(30,762,076	)		30,895,253			-100	%
Reversal of provision for direct financing lease losses		242,180			343,612			(101,432	)		-30	%
Net interest income /(loss) after provision for loan losses and financing lease losses		1,552,489			(28,480,303	)		30,032,792			105	%
Commissions and fees on financial guarantee services		26,308			120,623			(94,315	)		-78	%
Reversal of provision/(Provision) for financial guarantee services		385,352			(9,035,700	)		9,421,052			-104	%
Commission and fee income/(loss) on guarantee services, net		411,660			(8,915,077	)		9,326,737			-105	%
Net Revenue/(Loss)		1,964,149			(37,395,380	)		39,359,529			-105	%
Non-interest income
Other non-interest income		48,945			34,024			14,921			44	%
Total non-interest income		48,945			34,024			14,921			44	%
Non-interest expense
Salaries and employee surcharge		(548,978	)		(654,729	)		105,751			-16	%
Rental expenses		(64,850	)		(223,786	)		158,936			-71	%
Business taxes and surcharge		(21,798	)		(94,119	)		72,321			-77	%
Other operating expenses		(2,583,027	)		(1,692,323	)		(890,704	)		53	%
Total non-interest expense		(3,218,653	)		(2,664,957	)		(553,696	)		21	%
Foreign exchange loss		(557	)		(8,550	)		7,993			-93	%
Loss Before Income Taxes		(1,206,116	)		(40,034,863	)		38,828,747			-97	%
Income tax credit		-			(594,650	)		594,650			-100	%
Net Loss		(1,206,116	)		(40,629,513	)		39,423,397			-97	%
Loss per Share- Basic and Diluted		(0.086	)		(3.295	)		3.209			-97	%
Weighted Average Shares Outstanding-Basic and Diluted		14,026,815			12,330,721			1,696,094			14	%
Net Loss		(1,206,116	)		(40,629,513	)		39,423,397			-97	%
Other comprehensive income/(loss)
Foreign currency translation adjustment		205,546			(973,282	)		1,178,828			-121	%
Comprehensive Loss	$	(1,000,570	)	$	(41,602,795	)		40,602,225			98	%

41

The Company’s net loss for the nine months ended September 30, 2016 was US$1,206,116, representing a decrease of US$39,423,397, or 97%, from net loss of US$40,629,513 for the nine months ended September 30, 2015. The change in net income for the nine months ended September 30, 2016 was the net effect of the changes in the following components:

● a decrease in net interest income of US$761,029;

● a change in the provision for loan losses of US$30,895,253 from a provision of US$30,762,076 for the nine months ended September 30, 2015 to a reversal of provision of US$133,177 for the nine months ended September 30, 2016;

● a decrease in reversal of provision for direct financing lease losses of US$101,432;

● a change in the provision for financial guarantee of US$9,421,052 from a provision of US$9,035,700 for the nine months ended September 30, 2015 to a reversal of provision of US$385,352 for the nine months ended September 30, 2016;;

● an increase total non-interest expense of US$553,696; and

● a decrease in income tax credit of US$594,650;

The following paragraphs discuss changes in the components of net loss in greater details during the nine months ended September 30, 2016, as compared to the nine months ended September 30, 2015.

Net Interest Income

Net interest income is equal to interest income we generated less interest expenses on short-term bank loans we incurred. The Company’s net interest income decreased by US$761,029, or 39% to US$1,177,132 during the nine months ended September 30, 2016, as compared to net interest income of US$1,938,161 during the nine months ended September 30, 2015.

The interests and fees on loans, direct financing leases and deposits with banks decreased by US$1,153,682, or 49% from US$2,360,871 for the nine months ended September 30, 2015 to US$1,207,189 for the nine months ended September 30, 2016. The decrease is the combined effect of: (1) no addition of new loans or renewal of loans during the nine months ended September 30, 2016, leading to a significant decrease in interest income; and (2) the decrease in the amount of monthly interest received from long-aged loans resulting from the existing customers’ deteriorating loan quality.

As a traditional industry, the textile industry, which is the pillar industry in Wujiang area, as well as other industries, have been facing downward pressure. Additionally, the bank lenders usually require an old loan be paid in full upon maturity before they approve a new loan to the same borrower. Some SMEs have to borrow from so-called “underground” lenders, or shadow banks to repay the loans due to the banks. Additionally, the banks denied to extend new loans to some SMEs even after they made the full repayment for the loans due and satisfied other conditions. Management is concerned that the borrowers may use the proceeds from the loans we grant to them as a means of repayment to the other banks or even to the underground lenders, instead of using them in operations. Therefore, management decided to grant new loans in a more cautious manner. During the nine months ended September 30, 2016, we did not grant or renew any loans, as compared to grant of 48 loans with an average loan size of $372,000 during the nine months ended September 30, 2015. As a result, the interest income generated during the nine months ended September 30, 2016 declined.

Due to the long-term nature of our restricted deposits with third party banks, we utilized these deposits as term deposits which in turn generated interest income on deposits with banks of US$3,526 during the nine months ended September 30, 2016 as compared to US$15,378 during the nine months ended September 30, 2015. Caused by the contraction of our traditional guarantee business with banks, we have closed several restricted deposit accounts with banks through which we provided guarantee services to our customers. As a result, the interest income on deposits with bank was insignificant during the nine months ended September 30, 2016 and 2015, respectively.

Interest expense represents interest incurred on short-term bank loans. During the nine months ended September 30, 2016, the interest expense related to the loans from banks was US$30,057 as compared to US$422,710 for the same period last year. The interest expense incurred on short-term bank loans decreased by US$392,653, or 93%. This was mainly caused by repayment of all bank loans before March 2016, leading to a decrease of total bank borrowing balance by US$2.6 million from US$2.6 million as of December 31, 2015 to US$nil as of September 30, 2016.

42

Provision for Loan Losses

The Company reversed provision for loan losses of US$133,177 and accrued of a provision of $30,762,076 for the nine months ended September 30, 2016 and 2015, respectively. The provision for loan losses was determined by comparing the beginning and ending balance of allowance for loan losses for business and personal loans. If the ending balance of the allowance of loan losses after any charge offs (net of recoveries) is less than the beginning balance, it will be recorded as a “reversal”; if it is larger, it will be recorded as a “provision” in the allowance for loan loss. The netting amount of “reversal” and “provision” is presented in the consolidated statements of income and comprehensive income and the components of the provision for loan losses were disclosed in Note 7 of financial statements.

Provision for loan losses decreased by $30,895,253, or 100% for the nine months ended September 30, 2016, as compared to the same period last year. This is mainly due to the fact that the management charged off loan losses of US$41,134,020 during the three months ended September 30, 2015, leading to far more significant accrual of provision on loan losses during the three months ended September 30, 2015 as compared to the same period of 2016.

Since the beginning of 2014, the economic conditions in the eastern part of China, especially the Yangtze River Delta region, has been challenging due to the downturn of the general economic situation in China. Wujiang, which is in the heart of this region, has been significantly affected. The textile industry, which is the pillar industry in the Wujiang area, as well as other industries, has been facing downward pressure. As the local SMEs’ profitability and repayment ability deteriorates, “doubtful” and “loss” bank loans drastically increased. As such, our provision for loan losses substantially increased since 2014 and we had a significant allowance balance for loan losses as of September 30, 2016 and December 31, 2015.

In February and March 2015, the Company reviewed the classification of its loan portfolios within its rating system to test the adequacy of the allowances calculated thereby. As a result of such testing, the Company decided to reclassify certain loans into different categories. The Company reviewed the profile, financial condition and other relevant information and documents of each customer in the lending businesses. For customers with several loans with different due dates, if one of whose loans was past due, the Company decided to reclassify all loans of the customer's as past due (even the other loans that were not mature yet). For extended loans, the Company re-evaluated the customer's repayment ability in a more cautions manner and reclassified the loans of customers without very strong financial condition into the past due category. These reclassifications affected numerous customer accounts.

During the year ended December 31, 2015, management continued to assess the adequacy of the allowances in a cautious manner. Management assessed the collectability of loan receivable balances on an individual basis and concluded the collection from certain borrowers is remote. Therefore, management determined to charge off loan balances against allowances, in the amount of US$6.0 million, as these loans are deemed as uncollectible. Management concluded that these borrowers had neither ability nor intention to make repayment as (1) these charged loans are guarantee backed loans which are subordinated to asset backed loans these borrowers obtained from the banks, (2) most of our borrowers or their guarantors are in the textile industry and the majority of the textile businesses are struggling due to the continued and worsened downturn trend in China’s macro-economic environment during the third quarter of fiscal year 2015 and quite a number of textile businesses went bankrupt and (3) management was advised by local counsels representing the Company in the collection lawsuits that the chances of collection is quite remote given the large scale defaults in both large and small businesses in Wujiang region. During the nine months ended September 30, 2016, the Company assessed the charged-off loan balances recorded as of September 30, 2016 and was of the opinion that these balances were uncollectible.

43

Net Commission and Fee on Guarantee Business

The Company also generated net income by charging fees for financial guarantee services provided to our customers to help them obtain loans from other banks. We generally charge a one-time fee of 1.8% - 3.6% multiplied by the amount of loans being guaranteed, based on the nature of the guarantee and whether the customer is new or existing.

As of September 30, 2016, the off-balance-sheet financial guarantee amounted to US$11.3 million. The commissions and fees generated from our financial guarantee services decreased from US$120,623 for the nine months ended September 30, 2015 to US$26,308 for the nine months ended September 30, 2016, representing a decrease of US$94,315, or 78%. The reduction was due to the decreased number of guarantee transactions as management reduced the guarantee portfolio to control the default risk.

As of September 30, 2016, we have provided guarantees for a total of US$11.3 million underlying loans to approximately 14 financial guarantee service customers, as compared to a total of US$11.6 million as of December 31, 2015.

Provision on Financial Guarantee Services

The provision for financial guarantee services changed from a provision of $9,035,700 for the nine months ended September 30, 2015, to a reversal of provision of $385,352 for the nine months ended September 30, 2016, representing a change of $9,421,052. The change was mainly attributable to the repayment of $1.83 million from several financial guarantee customers who were classified as “loss customers” as of December 31, 2015.

The methodology the Company used to estimate the liability for probable guarantee loss considers the guarantee contract amount and a variety of factors, which include, dependence on the counterparty, latest financial position and performance of the customers, actual defaults, estimated future defaults, historical loss experience, estimated value of collaterals or guarantees the costumers or third parties offered, and other economic conditions such as the economic trend of the area and the country. The estimates are based upon currently available information. Based on the recent lawsuit results and repayment status by defaulted customers, the Company estimated approximately 50% of off-balance-sheet financial guarantee services may be subject to default and their repayment may be “not likely”. As of September 30, 2016 and December 31, 2015, the Company accrued approximately 50%of contract amount as compared to 1% of contract amount.

We accrued specific provision on the balance of repayment on behalf of defaulted customers according to “Five-Tier” principal. The Specific Reserve is based on the level of loss of each loan after categorizing the loan according to their risk. According to the “Five-Tier Principle” set forth in the Provision Guidance, the guarantees are categorized as “special-mention”, “substandard”, “doubtful” or “loss”. Normally, the provision rate is 2% for “special-mention”, 25% for “substandard”, 50% for “doubtful” and 100% for “loss”.

Since the beginning of 2016, People’s Bank of China injected a significant amount of liquidity to the market to encourage the development of emerging industries such as online-game, filming and virtual reality, which has made it easier than previous two years for entities to gain access to capital. However, the bank lenders are still cautious with SMEs in traditional industries. The bank lenders usually require an old loan be paid in full upon maturity before they approve a new loan to the same borrower. Since the end of the year ended December 31, 2014, the banks denied to extend new loans to many SMEs even after they made the full repayment for the loans due and satisfied other conditions. As a result, some of the SME borrowers for which we provided the guarantees decided to default on the bank loans. Therefore the amount of repayment we made to the bank lenders substantially increased since the year ended December 31, 2014. We have brought collection actions against both the borrowers and their counter-guarantors. However, management was advised by counsel in the collection action that the chance of collection is remote given the large scale bad debt prevalent in Wujiang region. During the nine months ended September 30, 2016, we charged off guarantee paid on behalf of one customer against accrual for financial guarantee service in the amount of US$0.12 million as compared to US$0.27 million  for the same period last year.

In February and March 2015, the Company revisited the classification of its guarantee portfolios within its rating system to test the adequacy of the allowances calculated thereby. As a result of such testing, the Company decided to reclassify certain guarantees into different categories. The Company reviewed the profile, financial condition and other relevant information and documents of each customer in the guarantee businesses. For customers with several guarantees with different due dates, if one guaranteed loan was past due, the Company decided to reclassify all of this customer's guaranteed loans as past due (even the other loans that were not mature yet). These reclassifications affected numerous customer accounts. We engaged He-Partners Law Firm, one of the largest law firms in Suzhou City, to represent us in the legal proceedings against the borrowers and their counter guarantors, and expect to collect part of the outstanding balance in a period ranging from six twelve months to one and a half year upon adjudication by the court in favor of the Company. The timing of collection and ultimate amount of funds we can recover depend on a few factors, including the repayment ability of the borrower and their counter-guarantors, the execution time of the court, other obligations the borrowers have and priority over the claim for the Company.

Non-interest Expenses

Non-interest expenses increased from US$2,664,957 for the nine months ended September 30, 2015 to US$3,218,653 for the nine months ended September 30, 2016, representing an increase of US$553,696, or 21%. Non-interest expenses primarily consisted of salary and employee surcharge, office rental expense, business tax and surcharge, depreciation of equipment, travel expenses, entertainment expenses, professional service fees, and other office supplies. The increase was mainly attributable to net effects of a decrease of salaries and employee surcharge by US$105,751, or 16%, a decrease of rental expenses by US$158,936, or 71% against an increase of other operating expenses by US$890,704, or 53%. Other operating expenses were higher during the nine months ended September 30, 2016 as compared to the nine months ended September 30, 2015, primarily due to an increase of provision for cash settlement against legal proceedings of US$690,000, an increase in issuance of restricted  shares to a financial consulting service provider of US$771,000 , netting off against an decrease in legal and consulting fee of US$563,813 caused by significant cost incurred for investigation of Mr. Qin’s misappropriation of RMB 7 million during the nine months ended September 30, 2015.

44

Income Tax

Income tax credit decreased from US$594,650 for nine months ended September 30, 2015 to US$nil for nine months ended September 30, 2016. The decrease in income tax is mainly attributable to the net operating loss carry forward from December 31, 2015, which can be utilized to offset the taxable income generated during the five years after the losses incurred. As a result of continuous operating losses incurred during the nine months ended September 30, 2016, US$nil income tax expenses were accrued.

Loan Portfolio Quality

One of our key objectives is to maintain a high level of loan portfolio quality. When a borrower fails to make a scheduled payment, we attempt to cure the deficiency by personally contacting the borrower. Initial contacts typically are made seven days after the date the payment is due, and warning letters are sent by our legal counsel approximately 90 days after the default. In most cases, deficiencies are promptly resolved. If the outstanding amount cannot be collected within 180 days after the maturity date and the parties could not reach an agreement on a specific repayment program, we will initiate legal proceedings.

We also keep the frequency of visits to our customers and observe their daily production on site from time to time to observe their operating condition and collect their financial information. Since most of our customers are in the Jiangsu area, it is also relatively easy to obtain information about our customers.

On loans where the collection of principal or interest payments is doubtful, the accrual of interest income ceases and become “non-accrual” loans. Except for loans that are sufficiently secured and in the process of collection, it is our policy to discontinue accruing additional interest and reverse any interest accrued on any loan which is 90 days or more past due.

We account for our impaired loans in accordance with U.S. GAAP. An impaired loan generally is one for which it is probable, based on current information, that the lender will not collect all the amounts due under the contractual terms of the loan. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment history and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for business and personal loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateralized.

We allow a one-time loan extension with time duration up to the original loan term, which is usually within twelve months. In order to qualify, the borrower must be current with its interest payments. We do not grant concession to borrowers as the principal of the loan remains the same and interest rate is fixed at the current interest rate at the time of extension.

We use a comprehensive methodology to monitor credit quality and prudently manage credit concentration within our portfolio of loans. Currently our loan portfolio concentrates in the textile industry and during the nine months ended September 30, 2016, both the domestic and international demand for textile products have been decreasing. To maintain our loan portfolio quality, we have modified our loan policy to accept only textile companies with real estate as collateral or guaranteed by guarantee companies. During the nine months ended September 30, 2016, we assessed the loan portfolio quality and charged-off loan receivable balances recorded as of September 30, 2016 and were of the opinion that these balances were uncollectible.

In addition, we plan to minimize our risks by concentrating on smaller amount loans that are below US$450,000 (or approximately RMB 3.0 million).

Currently, the banking industry encourages SMEs to apply for loans as individuals with recourse so that when it is past due, both the SME and the responsible individual are both liable for the past due amount and the individual borrower carries personal liability. As of September 30, 2016, our loan balance remained stable as compared to that as of December 31, 2015 with a decrease of US$2,585,798 in business loan and a decrease of US$950,584 in personal loan.

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The following table sets forth the classification of loans receivable as of September 30, 2016 and December 31, 2015, respectively:

	September 30, 2016 (Unaudited) Amount		Percent  of Total			December 31, 2015 Amount		Percent  of Total
Business loans	$	37,913,015		63.68	%	$	40,498,813		64.21	%
Personal loans		21,627,323		36.32	%		22,577,907		35.79	%
Total Loans receivable	$	59,540,338		100	%	$	63,076,720		100	%

Nonaccrual loans totaled US$40.78 million, or 68.50% of loans receivable as of September 30, 2016, as compared with US$32.12 million, or 50.92% of loans receivable, as of December 31, 2015. The allowance for loan losses was US$54.10 million, representing 90.87% of loans receivable and 132.67% of non-accrual loans as of September 30, 2016. As of December 31, 2015, the allowance for loan losses was US$55.60 million, representing 88.14% of loans receivable and 173.09% of non-accrual loans.

The following table sets forth information concerning our nonaccrual loans as of September 30, 2016 and December 31, 2015, respectively:

	September 30, 2016 (Unaudited)			December 31, 2015
Nonaccrual loans	$	40,782,260		$	32,118,910
Allowance for loan losses	$	54,104,303		$	55,595,654
Loans receivable	$	59,540,338		$	63,076,720
Total assets	$	22,452,591		$	24,446,840
Nonaccrual loans to loans receivable		68.50	%		50.92	%
Nonperforming assets to total assets		181.64	%		131.38	%
Allowance for loan losses to loans receivable		90.87	%		88.14	%
Allowance for loan losses to non-accrual loans		132.67	%		173.09	%

As a traditional industry, the textile industry, which is the pillar industry in Wujiang area, as well as other industries, have been facing downward pressure. As the local SMEs’ profitability and repayment ability deteriorates, “special mentioned”, “substandard” and “doubtful’ bank loans drastically increased. As such, our provision for loan losses remained at a high level as of September 30, 2016.

46

Cash Flows and Capital Resources

We have financed our operations primarily through shareholder contributions, cash flow from operations, bank loans, and public offerings of securities. As a result of our total cash activities, net cash increased from US$306,401 as of December 31, 2015 to US$1,167,361 as of September 30, 2016.

Going Concern

These and other factors disclosed in this quarterly report raise substantial doubt as to the Company’s ability to continue as a going concern. Management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, will provide sufficient liquidity to meet the Company obligations for a reasonable period of time. 

Financial Support

The Company is actively seeking other strategic investors with experience in lending business. If necessary, the shareholders of Wujiang Luxiang will contribute more capital into Wujiang Luxiang. On June 8, 2016, the Company closed a private placement with a third-party individual investor to issue 2,439,025 common shares, at a per share price of US$0.41, and raised US$1,000,000 from therefrom. This transaction was at arm’s length. The shares shall be authorized for listing on the NASDAQ capital market, and the net proceeds of the sale of the shares shall be used by the Company for working capital and general corporate purpose. These issued and outstanding shares are deemed a permanent equity of the Company.

Improvement in Working Capital Management

In order to meet the capital needs for our continued operations, we continue to use our best effort to improve our collection of loan receivable and interest receivable. We engaged four law firms, Jiangsu Zhenyuzhen Law Firm, Jiangsu Tianbian Law Firm, Jiangsu Mingren Law Firm and He-Partners Law Firm to represent us in the legal proceedings against the borrowers and their counter guarantors. Among them, He-Partners Law Firm, is one of the largest law firms in Suzhou City.

While management believes that the measures in the liquidity plan will be adequate to satisfy its liquidity and cash flow requirements for the twelve months ending September 30, 2017, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan will have a material adverse effect on the Company’s business, results of operations and financial position, and may materially adversely affect its ability to continue as a going concern.

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Statement of Cash Flows

The following table sets forth a summary of our cash flows for the nine months ended September 30, 2016 and 2015, respectively:

	For the nine months ended  September 30,
	2016 (Unaudited)			2015 (Unaudited)
Net cash used in operating activities	$	(47,871	)	$	(193,104	)
Net cash provided by investing activities		2,499,916			2,542,148
Net cash used in financing activities		(1,600,832	)		(6,641,289	)
Effects of exchange rate changes on cash		9,747			(35,845	)
Net cash inflow/(outflow)	$	860,960		$	(4,328,090	)

Net Cash Used in Operating Activities

During the nine months ended September 30, 2016, we had a cash outflow from operating activities of US$47,871, a decrease of US$145,233 as compared to a cash outflow of US$193,104 for the same period last year. We generated a net loss for the nine months ended September 30, 2016 of US$1,206,116, a change of US$39,423,397 from the nine months ended September 30, 2015, during which we incurred a net loss of US$40,629,513. In addition to the change in profitability, the decrease in net cash used in operating activities was the result of several factors, including:

● A change of provision on loan losses of US$30,895,253. The Company reversed a provision for loan losses of US$133,177 for the nine months ended September 30, 2016, as compared to a provision of US$30,762,076 made during the nine months ended September 30, 2015. The change of the loan provision is mainly due to the fact that the Company charged off loan losses of US$41,134,020 during the nine months ended September 30, 2015, while the Company charged-off no loans during the same period ended September 30, 2016;

● A reversal of provision on financial guarantee services of US$382,352 was made during the nine months ended September 30, 2016 due to payments from certain financial guarantee customers who were previously classified as “loss customers” as of December 31, 2015, as compared to an accrual of provision on financial guarantee services of US$9,035,700 was made during the nine months ended September 30, 2015;

● An increase in restricted shares issued to directors and professional service providers of US$1,106,024. Due to the deteriorating direct loan services and financial guarantee services, the Company actively involved financial consulting service providers to find new business models to increase its profitability. As a result, the Company issued more restricted shares during the nine months ended September 30, 2016,

● The decrease in changes in interest receivable by US$473,968. The interest receivable increased by nil and US$473,968 as of September 30, 2016 and 2015, respectively, as compared to December 31, 2015 and 2014. This is mainly attributable to a significant increase in long-aged loans during the nine months ended September 30, 2016, leading to reversal of interest receivable;

Net Cash Provided by Investing Activities 

Net cash provided by investing activities for the nine months ended September 30, 2016 was US$2,499,916 as compared to net cash provided by investing activities of US$2,542,148 for the nine months ended September 30, 2015. The cash provided by investing activities for the nine months ended September 30, 2016 was mainly collection of principals of US$2,147,593 from third party customers of direct loan business, collection of US$1,825,730 from third party customers of financial guarantee services, and collection of principal of US$484,361 from direct financing lease customers. The cash provided by investing activities for the nine months ended September 30, 2015 was mainly caused by payment on behalf of default guarantees of $5,639,237, loan disbursement to third party customers of $17,934,721, netting off collection from guarantees for loan paid on behalf of $749,980, collection from direct loan business of $23,623,776, and installment repayment from direct financing lease customers of $422,199.

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Net Cash Used in Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2016 totaled US$1,600,832 as compared to net cash used in financing activities of US$6,641,289 for the nine months ended September 30, 2015. The cash used in financing activities for the nine months ended September 30, 2016 was mainly attributable the repayment of bank borrowing of US$2,600,832 and cash collection of US$1,000,000 from a private placement of 2,439,025 shares. During the nine months ended September 30, 2015, the cash used in financing activities was mainly attributable to the repayment of bank borrowing of US$6,641,289.

Contractual Obligations

As of September 30, 2016, the annual amounts of future minimum payments under certain of our contractual obligations were:

	Payment due by period (Unaudited)
	Total		Less than  1 year		1-2 years		2-3 years		3-5 years		5 years  and after
Contractual obligations:
Short term bank loans (1)	$	-	$	-	$	-	$	-	$	-	$	-
Operating lease (2) (3)		323,829		59,968		71,962		71,962		119,937		-
	$	323,829	$	59,968	$	71,962	$	71,962	$	119,937	$	-

(1) As of September 30, 2016, the Company repaid all outstanding bank borrowings. The bank borrowings bear an average annual interest rate of 6.31%.

(2) Our prior lease for our office in Wujiang commenced on October 1, 2013 and would expire on December 31, 2018. In October 2015, we terminated this office lease as we leased a new office (see note 3). No penalty was paid for early termination.

(3) During the year ended December 31, 2015, we leased a new office. The new lease commenced on June 1, 2015 and will expire on May 31, 2021. The Company has the right to extend the lease before its expiration with a one-month's prior written notice.

Off-Balance Sheet Arrangements

These financial guarantee contracts consist of providing guarantees to banks on behalf of borrowers to help them obtain loans from banks. The contract amounts reflect the extent of involvement the Company has in the guarantee business and also represents the Company’s maximum exposure to credit loss.

The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its borrowers. Financial instruments whose contract amounts represent credit risk are as follows.

	September 30, 2016 (Unaudited)		December 31, 2015
Guarantee	$	11,341,455	$	11,653,342

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Critical Accounting Policies

We prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reported amount of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and reported amounts of revenue and expenses during the reporting periods. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.

An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur, could materially impact the condensed financial statements. We believe that the following accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates. The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our condensed financial statements and other disclosures included in this report.

Termination of VIE agreements with Pride Information

On April 11, 2015, WFOE delivered a notice of termination to Pride Information. As a result, the contractual arrangements between WFOE, Pride Information and Mr. Qin were terminated effective on May 11, 2015 and WFOE no longer controls Pride Information.

Pride Information operates an online portal (www.pridelendingclub.com) to match prospective borrowers with lenders. As of May 11, 2015, Pride Information was in the beginning stage of operation and had generated minimal revenue. The derecognition of Pride Information was accounted for as a deconsolidation.

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Revenue recognition

Revenue is recognized when there are probable economic benefits to the Company and when the revenue can be measured reliably, on the following:

● Interest income on loans. Interest on loan receivables is accrued monthly in accordance with their contractual terms and recorded in accrued interest receivable. The Company does not charge prepayment penalty from customers. Additionally, any previously accrued but uncollected interest is discontinued of accrual and reversed, when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days.

● Commission on guarantee service. The Company receives the commissions from guarantee services in full at inception and records as unearned income before amortizing it throughout the period of guarantee.

● Income on direct financing lease. The financing agreements are classified as direct financing lease as prescribed by the Financial Accounting Standards Board ("FASB Codification"). Revenues representing the capitalized costs of the investment are recognized as income upon inception of the leases. The portion of revenues representing the difference between the gross investment in the lease (the sum of the minimum lease payments and the guaranteed residual value, if any) and the sum of the present value of the two components is recorded as unearned income and amortized over the lease term

Taxes assessed by governmental authorities that are directly imposed on revenue-producing transactions between the Company and its customers (which may include, but are not limited to, sales, use, value added and some excise taxes) are excluded from revenues.

Lessees are responsible for all taxes, insurance and maintenance costs.

● Non-interest income. Non-interest income mainly includes rental income from the sub-leasing of certain of the Company’s leased office space to third parties and income from disposal of property and equipment

Loans receivable, net

Loans receivable primarily represent loan amount due from customers. The management has the intent and ability to hold such receivable for the foreseeable future or until maturity or payoff. Loans receivable are recorded at unpaid principal balances, net of allowance for loan losses that reflects the Company’s best estimate of the amounts that will not be collected. Loan origination and commitment fees and certain direct loan origination costs collected from customers are directly recorded in current year interests and fees on loans. The loans receivable portfolio consists of corporate loans and personal loans (Note 6). The Company does not charge loan origination and commitment fees.

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Allowance for loan losses and loan impairment

The allowance for loan losses is increased by charges to income and decreased by charge offs (net of recoveries). Recoveries represent subsequent collection of amounts previously charged-off. The increase in allowance for loan losses is the netting effect of “reversal” and “provision” for both business and personal loans. If the ending balance of the allowance for loan losses after any charge offs (net of recoveries) is less than the beginning balance, it will be recorded as a “reversal”; if it is larger, it will be recorded as a “provision” in the allowance for loan loss. The netting amount of the “reversal” and the “provision” is presented in the consolidated statements of operations and comprehensive income (loss).

The Company recognizes a charge-off when management determines that full repayment of a loan is not probable. The primary factor in making that determination is the potential outcome of a lawsuit against the delinquent debtor. The Company will recognize a charge-off when the Company loses contact with the delinquent borrower for more than six months or when the court rules against the Company to seize the collateral asset of the delinquent debt from either the guarantor or borrower.

The allowance for loan losses is maintained at a level believed to be reasonable by management to absorb probable losses inherent in the portfolio as of each balance sheet date. The allowance is based on factors such as the size and current risk characteristics of the portfolio, an assessment of individual loan and actual loss, delinquency, and/or risk rating record within the portfolio. The Company evaluates its allowance for loan losses on a quarterly basis or more often as necessary.

The allowance is calculated at portfolio-level since our loans portfolio is typically of smaller balance homogenous loans and is collectively evaluated for impairment. Additionally, the management also reviewed the portfolio on a loan by loan basis and individually evaluated each loan for impairment if any.

For the purpose of calculating portfolio-level reserves, we have grouped our loans into two portfolio segments: Corporate and Personal. The allowance consists of the combination of a quantitative assessment component based on statistical models, a retrospective evaluation of actual loss information to loss forecasts, value of collaterals and could include a qualitative component based on management judgment.

In estimating the probable loss of the loan portfolio, the Company also considers qualitative factors such as current economic conditions and/or events in specific industries and geographical areas, including unemployment levels, trends in real estate values, peer comparisons, and other pertinent factors such as regulatory guidance. Finally, as appropriate, the Company also considers individual borrower circumstances and the condition and fair value of the loan collateral, if any.

In addition, the Company calculates the provision amount as below:

1. General Reserve - is based on total loan receivable balance and to be used to cover unidentified probable loan loss. According to management assessment, the General Reserve is required to be no less than 1% of total loan receivable balance.

2. Special Reserve - is fund set aside covering losses due to risks related to a particular country, region, industry, company or type of loans. The reserve rate could be decided based on management estimate of loan collectability. The Loan portfolio did not include any loans outside of the PRC.

While management uses the best information available to make loan loss allowance evaluations, adjustments to the allowance may be necessary based on changes in economic and other conditions or changes in accounting guidance.

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Income Tax

Current income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the liability approach. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income.

Recently issued accounting standards

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company is evaluating this ASU and has not determined the effect of this standard on its ongoing financial reporting.

In June 2016, the FASB issued new accounting guidance for recognition of credit losses on financial instruments, which is effective January 1, 2020, with early adoption permitted on January 1, 2019. The guidance introduces a new credit reserving model known as the Current Expected Credit Loss (CECL) model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information and will likely result in earlier recognition of credit reserves. Credco does not intend to adopt the new standard early and is currently evaluating the impact the new guidance will have on its financial position, results of operations and cash flows; however, it is expected that the new CECL model will alter the assumptions used in calculating credit losses on Card Member receivables and loans, among other financial instruments, and may result in material changes to Credco’s credit reserves.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES 

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of September 30, 2016 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission (“SEC”) rules and forms, and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

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Inherent Limitations Over Internal Controls

The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S GAAP. The Company’s internal control over financial reporting includes those policies and procedures that:

i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and

iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Management, including the Company’s principal executive officer and principal financial officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2016 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in various legal actions arising in the ordinary course of its business. As September 30, 2016, the Company was involved in 106 lawsuits, among which 69 were related to its loan business and 37 were related to guarantee business. The Company initiated legal proceedings to collect delinquent balances from borrowers and guarantees. 84 of these cases with an aggregated claim of $39.63 million have been adjudicated by the Court in favor of the Company and these cases are settled or in the process of enforcement. The remaining 22 cases with an aggregated claim of $15.02 million have not been adjudicated by the Court as of September 30, 2016.

On August 6, 2014, a purported shareholder Andrew Dennison filed a putative class action complaint in the United States District Court District of New Jersey (the “N.J. district court”) relating to a July 25, 2014 press release about the Company’s progress in recovering a significant portion of the $5.4 million the Company paid in the first quarter of 2014 on behalf of loan guarantee customers. The action, Andrew Dennison v. China Commercial Credit, Inc., et al., Case No. 2:2014-cv-04956, alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Xiangdong Xiao, and John F. Levy violated the federal securities laws by misrepresenting in prior public filings certain material facts about the risks associated with its loan guarantee business. On October 2, 2014, purported shareholders Zhang Yun and Sanjiv Mehrotra (the “Yun Group”) asserted substantially similar claims against the same defendants in a putative class action captioned Zhang Yun v. China Commercial Credit, Inc., et al., Case No. 2:14-cv-06136 (D. N.J.). Neither complaint states the amount of damages sought.

On or about October 6, 2014, Dennison, the Yun Group and another purported shareholder, Jason Stark, filed motions to consolidate the cases, be appointed as lead plaintiff and to have their respective counsel appointed as lead counsel. On October 31, 2014, the N.J. district court entered an order consolidating the cases under the caption “In re China Commercial Credit Inc. Securities Litigation” and appointing the Yun Group as lead plaintiff (“Class Plaintiff”) and the Yun Group’s counsel as lead counsel.

On November 18, 2014, the Yun Group and the Company, which at that point was the only defendant served, entered into a stipulation to transfer of the case to the Southern District of New York. On December 18, 2014, Mr. Levy, who had by then been served, joined in the stipulation. On December 29, 2014, the N.J. district court entered an order transferring the action. The transfer was effected on January 22, 2015, and assigned docket number 1:15-cv-00557-ALC (S.D.N.Y.) (the “Securities Class Action”).

Under the schedule stipulated by the parties, the Yun Group was to file an amended complaint within 60 days of the date that the transfer was effected, and the defendants’ date to answer or move was within 60 days of that filing. On April 7, 2015, the Class Plaintiff filed a Second Amended Class Action Complaint (the “CAC”). The CAC also asserts securities law claims against defendants Axiom Capital Management, Inc., Burnham Securities Inc. and ViewTrade Securities, Inc. (collectively, the “Underwriter Defendants”). The CAC alleges that the Company engaged in a fraudulent scheme by engaging in undisclosed and improper lending practices and made misleading representations regarding its underwriting policies, the loan portfolio quality, the loan loss allowance, compliance with U.S. GAAP and its internal control systems.

55

In accordance with the Court’s procedures, the Company and Mr. Levy and the Underwriter Defendants requested a Pre-Motion Conference in anticipation of filing a motion to dismiss the CAC, which was held on June 25, 2015. At the conference, the Court adjourned the date to answer or move in order to provide the Class Plaintiff with time to serve certain overseas defendants. After the conference, the Class Plaintiff voluntarily dismissed Jianming Yin, Jinggen Ling and Xiangdong Xiao from the action, and Long Yi agreed to waive service, which left Huichun Qin as the sole remaining defendant to serve. The case remains stayed pending service of Huichun Qin.

On April 22, 2016, the Company entered into a Stipulation and Agreement of Settlement (the “Stipulation”) to settle the Securities Class Action. The Stipulation resolves the claims asserted against the Company and certain of its current and former officers and directors in the Securities Class Action without any admission or concession of wrongdoing or liability by the Company or the other defendants. The Stipulation also provides, among other things, a settlement payment by the Company of $225,000 in cash and the issuance of 750,000 shares of its common stock (the “Settlement Shares”) to the class members. The terms of the Stipulation are subject to approval by the Court following notice to all class members. The issuance of the Settlement Shares is expected to be exempt from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. It is probable that the Stipulation will be approved by the Court and take effect. The Company accrued settlement cost aggregating US$ 690,000 during the six months ended June 30, 2016.

Two of the Underwriter Defendants, Axiom Capital Management, Inc., and ViewTrade Securities, Inc., have asserted their respective rights to indemnification under the Underwriting Agreements entered into in connection with the Company’s initial public offering and secondary offering. On or about March 16, 2016, CCCR entered into an Advance Funding and Escrow Agreement, under which the CCCR agreed to deposit shares into escrow to fund the advancement obligation, with the initial deposit to be shares valued at Two Hundred Thousand Dollars ($200,000), based upon 80% of the 30 day volume weighted average trading price for each of the 30 consecutive trading days prior to the date of the agreement.

On February 3, 2015, a purported shareholder Kiram Kodali filed a putative shareholder derivative complaint in the United States District Court for the Southern District of New York, captioned Kiran Kodali v. Huichun Qin, et al., Case No. 15-cv-806. The action alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Chunfang Shen, John F. Levy, Xiaofang Shen and Chunjiang Yu violated their fiduciary duties, grossly mismanaged the Company and were unjustly enriched based upon the transfer that was the subject of the Internal Review and other grounds substantially similar to those asserted in the class action complaints. Kodali did not serve a demand upon the Company and alleges that demand is excused. The Company and Mr. Levy have been served. An amended derivative complaint was filed on April 20, 2015. On May 29, 2015, the Court “so ordered” a stipulation among Kodali, the Company and Mr. Levy staying all proceedings in the derivative case except for service of process on individual defendants until the earlier of thirty days of termination of the stipulation, dismissal of the class action with prejudice or the date any of the defendants in the class action file an answer to the CAC. The Company believes that this lawsuit is without merit and intends to vigorously defend against it. At this stage of the proceedings, the Company is not able to estimate the probability of success or loss.

On May 18, 2015, WFOE filed a civil complaint against Huichun Qin with the Wujiang Region Suzhou City People’s Court claiming Mr. Qin’s misappropriation of RMB 7 million in July 2014. The complaint was rejected due to a procedural issue. The Company has since learned that Mr. Qin has been convicted and sentenced to a term of incarceration of approximately five years. In view of this information, the Company is evaluating its strategic options.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On September 14, 2016, the Company issued 300,000 restricted shares to a third-party consultant for consulting services provided pursuant to certain Advisory Agreement. On October 4, 2016, the Company issued 300,000 restricted shares of to another third-party advisor as consideration for certain advisory services pursuant to certain Advisory Agreement. All these shares are issued pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS

The following exhibits are filed herewith:

Exhibit No.	Description
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

*Filed herewith.

**Furnished herewith. 

57

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

November 14, 2016	CHINA COMMERCIAL CREDIT, INC.
	By:	/s/ Mingjie Zhao
		Mingjie Zhao
		Chief Executive Officer
		(Principal Executive Officer)
	By:	/s/ Long Yi
		Long Yi
		Chief Financial Officer (Principal Financial and Accounting Officer)

58

Exhibit No.	Description
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

*Filed herewith.

**Furnished herewith.

 59

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mingjie Zhao, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended  September 30, 2016 of China Commercial Credit, Inc.;
2	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2016	By:	/s/ Mingjie Zhao
		Mingjie Zhao Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Long Yi, certify that:

1	I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016 of China Commercial Credit, Inc.;
2	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2016	By:	/s/ Long Yi
		Long Yi Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF SARBANES-OXLEY ACT OF 2002

I, Mingjie Zhao, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of China Commercial Credit, Inc. (the “Company”) for the quarterly period ended September 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2016	By:	/s/ Mingjie Zhao
		Mingjie Zhao
		Chief Executive Officer (Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

EX-32.2

 EXHIBIT 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF SARBANES-OXLEY ACT OF 2002

I, Long Yi, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of China Commercial Credit, Inc. (the “Company”) for the quarterly period ended September 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2016	By:	/s/ Long Yi
		Long Yi
		Chief Financial Officer (Principal Financial and Accounting Officer)

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 11, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	China Commercial Credit Inc
Entity Central Index Key	0001556266
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2016
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		16,637,679

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Dec. 31, 2015
ASSETS
Cash	$ 1,167,361	$ 306,401
Restricted cash	9,925	388,361
Notes receivable	142,424	15,404
Loans receivable, net of allowance for loan losses of $54,104,303 and $55,595,653 for September 30, 2016 and December 31, 2015, respectively	5,436,035	7,481,067
Investment in direct financing lease, net of allowance for direct financing lease losses of $2,542,163 and $2,857,554 for September 30, 2016 and December 31, 2015, respectively	907,017	1,177,442
Due from a related party	1,918,977
Property and equipment, net	120,493	126,120
Intangible asset	969	4,435
Guarantee paid on behalf of guarantee service customers	12,147,982	14,031,603
Guarantee paid on behalf of related party	324,005	622,807
Other assets	277,403	293,200
Total Assets	22,452,591	24,446,840
Liabilities
Short-term bank loans		2,618,729
Deposits payable	779,584	1,070,598
Unearned income from financial guarantee services and finance lease services	36,406	61,302
Accrual for financial guarantee services	18,309,981	19,322,557
Other current liabilities	297,059	182,242
Income tax payable	162,206	126,485
Deferred tax liability	158,980	204,266
Total Liabilities	19,744,216	23,586,179
Shareholders' Equity
Common stock (par value $0.001 per share, 100,000,000 shares authorized; 16,137,679 and 12,390,062 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively)	16,138	12,390
Subscription receivable	(1,062)	(1,062)
Additional paid-in capital	62,514,540	59,698,864
Statutory reserve	5,442,150	5,442,150
Due from a non-controlling shareholder	(1,049,441)	(1,078,300)
Accumulated deficit	(69,460,635)	(68,254,520)
Accumulated other comprehensive income	5,246,685	5,041,139
Total Shareholders' Equity	2,708,375	860,661
Total Liabilities and Shareholders' Equity	22,452,591	24,446,840
Series A Preferred Stock [Member]
Shareholders' Equity
Preferred Stock
Series B Preferred Stock [Member]
Shareholders' Equity
Preferred Stock

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Allowance for loan losses	$ 54,488,203	$ 55,595,653
Investment in direct financing lease	$ 2,542,163	$ 2,857,554
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	16,137,679	12,390,062
Common stock, shares outstanding	16,137,679	12,390,062
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Series B Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding

XML

Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Interest income
Interests and fees on loans and direct financing lease	$ 722,117	$ 156,498	$ 1,203,663	$ 2,345,493
Interests on deposits with banks	263	7,054	3,526	15,378
Total interest and fee income	722,380	163,552	1,207,189	2,360,871
Interest expense
Interest expense on short-term bank loans		(96,880)	(30,057)	(422,710)
Net interest income	722,380	66,672	1,177,132	1,938,161
Reversal of provision /(Provision) for loan losses	226,694	(29,210,186)	133,177	(30,762,076)
Reversal of provision /(Provision) for direct financing lease losses	242,180	(163,922)	242,180	343,612
Net interest income /(loss) after provision for loan losses and financing lease losses	1,191,254	(29,307,436)	1,552,489	(28,480,303)
Commissions and fees on financial guarantee services	9,117	24,565	26,308	120,623
(Provision) /Reversal of provision for financial guarantee services	(599,808)	(7,322,936)	385,352	(9,035,700)
Commission and fee (loss) /income on guarantee services, net	(590,691)	(7,298,371)	411,660	(8,915,077)
Net Revenue/(Loss)	600,563	(36,605,807)	1,964,149	(37,395,380)
Non-interest income
Other non-interest income		19,439	48,945	34,024
Total non-interest income		19,439	48,945	34,024
Non-interest expense
Salaries and employee surcharge	(120,130)	(131,778)	(548,978)	(654,729)
Rental expenses	(28,132)	(83,501)	(64,850)	(223,786)
Business taxes and surcharge	9,617	(12,008)	(21,798)	(94,119)
Other operating expenses	(1,086,092)	(348,094)	(2,583,027)	(1,692,323)
Total non-interest expense	(1,224,737)	(575,381)	(3,218,653)	(2,664,957)
Foreign exchange (loss)/gain	(271)	1,194	(557)	(8,550)
Loss Before Income Taxes	(624,445)	(37,160,555)	(1,206,116)	(40,034,863)
Income tax expense/(credit)		58,609		(594,650)
Net Loss	$ (624,445)	$ (37,101,946)	$ (1,206,116)	$ (40,629,513)
Loss per Share- Basic and Diluted	$ (0.039)	$ (2.994)	$ (0.086)	$ (3.295)
Weighted Average Shares Outstanding-Basic and Diluted	15,889,853	12,390,062	14,026,815	12,330,721
Net Loss	$ (624,445)	$ (37,101,946)	$ (1,206,116)	$ (40,629,513)
Other comprehensive income/(loss)
Foreign currency translation adjustment	260,803	(1,352,337)	205,546	(973,282)
Comprehensive Loss	$ (363,642)	$ (38,454,283)	$ (1,000,570)	$ (41,602,795)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows from Operating Activities:
Net loss	$ (1,206,116)	$ (40,629,513)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	46,455	89,841
(Reversal of provision) /Provision for loan losses	(133,177)	30,762,076
Reversal of provision for direct financing lease losses	(242,180)	(343,612)
(Reversal of provision)/ Provision for financial guarantee services	(385,352)	9,035,700
Deferred tax (credit)/expense	(40,364)	587,141
Income from disposal of property and equipment	(48,945)	(14,585)
Restricted shares issued to executive officers and professional services	1,354,424	248,400
Provision for settlement expenses against legal proceedings	465,000
Changes in operating assets and liabilities:
Interest receivable		473,968
Other assets	8,060	(258,035)
Unearned income from guarantee services and finance lease services	(23,572)	(96,730)
Other current liabilities	118,255	(30,910)
Income tax payable	39,641	(16,845)
Net Cash Used in Operating Activities	(47,871)	(193,104)
Cash Flows from Investing Activities:
Originated loans disbursement to third parties		(17,934,721)
Loans collection from third parties	2,147,593	23,623,776
Payment of loans on behalf of guarantees	(127,886)	(5,639,237)
Payment of loans on behalf of a related party		(263,687)
Collection from guarantees for loan paid on behalf of customers	1,825,730	749,980
Collection of principal of finance lease, in installments	484,361	422,199
Deposit released from banks for financial guarantee services	801,530	1,870,298
Deposit paid to banks for financial guarantee services	(694,403)	(303,634)
Purchases of property and equipment and intangible asset	(48,342)	(1,461)
Disposal of property and equipment	56,557	18,635
Short-term loan paid to a related party	(1,945,224)
Net Cash Provided by Investing Activities	2,499,916	2,542,148
Cash Flows From Financing Activities:
Cash raised in private placement	1,000,000
Repayment of short-term bank borrowings	(2,600,832)	(6,641,289)
Net Cash Used in Financing Activities	(1,600,832)	(6,641,289)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	9,747	(35,845)
Net Increase/(Decrease ) In Cash and Cash Equivalents	860,960	(4,328,090)
Cash and Cash Equivalents at Beginning of Period	306,401	4,991,973
Cash and Cash Equivalents at End of Period	1,167,361	663,883
Supplemental Cash Flow Information
Cash paid for interest expense	30,057	422,710
Cash paid for income tax		$ 3,563

XML

Organization and Principal Activities

9 Months Ended

Sep. 30, 2016

Organization and Principal Activities [Abstract]

ORGANIZATION AND PRINCIPAL ACTIVITIES

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

China Commercial Credit, Inc. (“CCC” or “the Company”) is a holding company that was incorporated under the laws of the State of Delaware on December 19, 2011.

Wujiang Luxiang Rural Microcredit Co., Ltd (“Wujiang Luxiang”) is a company established under the laws of the PRC on October 21, 2008 and its shareholders consist of 11 companies established under the laws of the People's Republic of China (“PRC”) and 1 PRC individual, Mr. Qin Huichun, the Company's former CEO (collectively, the "Wujiang Luxiang Shareholders"). The Company is a microcredit company primarily engaged in providing direct loans and financial guarantee services to small-to-medium sized enterprises (“SMEs”), farmers and individuals in Wujiang City, Jiangsu Province, PRC.

On August 7, 2012, CCC entered into certain share exchange agreements with 16 PRC individuals, each of whom is the sole shareholder of a British Virgin Island company (collectively “16 BVI entities”) and the 16 BVI entities. These 16 PRC individuals represent the ultimate owners of the Wujiang Luxiang Shareholders.

Upon completion of the share exchange, the 16 PRC individuals, through their respective BVI entities, acquired 7,270,920 shares of Common Stock, par value $0.001 per share (the "Common Stock") of CCC in exchange for their agreement to cause the Wujiang Luxiang Shareholders to enter into the Variable Interest Entity (the “VIE”) Agreements. As a result of the share exchange, the 16 BVI entities became CCC shareholders, who collectively owned approximately 90% of CCC’s total issued and outstanding shares of Common Stock at the time of the share exchange.

Since at the time of the share exchange neither CCC nor the 16 BVI entities had any operations and only a minor amount of net assets, the share exchange shall be considered as a capital transaction in substance, rather than a business combination.

The share exchange is recorded as a “reverse recapitalization” equivalent to the issuance of stocks to the 16 BVI entities for the net monetary assets of CCC. The accounting for the transaction is identical to a reverse acquisition, except that no goodwill is recorded.

Management of the Company looked through the 16 BVI entities and treated the share exchange as a reverse merger between CCC and Wujiang Luxiang for accounting purposes, even though the share exchange was between CCC and the 16 BVI entities, because of the following reasons: (i) neither CCC nor the 16 BVI entities had any operations and only a minor amount of net assets; (ii) the 16 PRC individual, who are the owners of the 16 BVI entities, are the ultimate owners of Wujiang Luxiang, and (iii) the sole purpose of the share exchange was to issue approximately 90% of pre-public offering CCC shares to the ultimate owners of Wujiang Luxiang Shareholders.

VIE AGREEMENTS WITH WUJIANG LUXIANG

Subsequent to the share exchange, on September 26, 2012, the Company through its indirectly wholly owned subsidiary, Wujiang Luxiang Information Technology Consulting Co. Ltd. (“WFOE”), entered into a series of VIE Agreements with Wujiang Luxiang and the Wujiang Luxiang Shareholders. The purpose of the VIE Agreements is solely to give WFOE the exclusive control over Wujiang Luxiang’s management and operations.

The significant terms of the VIE Agreements are summarized below:

Exclusive Business Cooperation Agreement

Pursuant to the Exclusive Business Cooperation Agreement between Wujiang Luxiang and WFOE, WFOE provides Wujiang Luxiang with technical support, consulting services and other management services relating to its day-to-day business operations and management, on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, Wujiang Luxiang grants an irrevocable and exclusive option to WFOE to purchase from Wujiang Luxiang any or all of its assets at the lowest purchase price permitted under PRC laws. For services rendered to Wujiang Luxiang by WFOE under the Agreement, the service fee Wujiang Luxiang is obligated to pay shall be calculated based on the time of services rendered multiplied by the corresponding rate, which is approximately equal to the net income of Wujiang Luxiang.

The Exclusive Business Cooperation Agreement shall remain in effect for ten years unless it is terminated by WFOE with 30-day prior notice. Wujiang Luxiang does not have the right to terminate the agreement unilaterally. WFOE may unilaterally extend the term of this agreement with prior written notice.

Share Pledge Agreement

Under the Share Pledge Agreement between the Wujiang Luxiang Shareholders and WFOE, the 12 Wujiang Luxiang Shareholders pledged all of their equity interests in Wujiang Luxiang to WFOE to guarantee the performance of Wujiang Luxiang’s obligations under the Exclusive Business Cooperation Agreement.  Under the terms of the agreement, in the event that Wujiang Luxiang or its shareholders breach their respective contractual obligations under the Exclusive Business Cooperation Agreement, WFOE, as pledgee, will be entitled to certain rights, including, but not limited to, the right to collect dividends generated by the pledged equity interests.  The Wujiang Luxiang Shareholders also agreed that upon occurrence of any event of default, as set forth in the Share Pledge Agreement, WFOE is entitled to dispose of the pledged equity interest in accordance with applicable PRC laws.  The Wujiang Luxiang Shareholders further agree not to dispose of the pledged equity interests or take any actions that would prejudice WFOE’s interest.

Exclusive Option Agreement

Under the Exclusive Option Agreement, the Wujiang Luxiang Shareholders irrevocably granted WFOE (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in Wujiang Luxiang.  The option price is equal to the capital paid in by the Wujiang Luxiang Shareholders subject to any appraisal or restrictions required by applicable PRC laws and regulations.

Power of Attorney

Under the Power of Attorney, the Wujiang Luxiang Shareholders authorize WFOE to act on their behalf as their exclusive agent and attorney with respect to all rights as shareholders, including but not limited to:  (a) attending shareholders' meetings; (b) exercising all the shareholder's rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of Wujiang Luxiang. The Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution, so long as the Wujiang Shareholder is a shareholder of the Company.

Timely Reporting Agreement

To ensure Wujiang Luxiang promptly provides all of the information that WFOE and the Company need to file various reports with the SEC, a Timely Reporting Agreement was entered between Wujiang Luxiang and the Company.

Under the Timely Reporting Agreement, Wujiang Luxiang agrees that it is obligated to make its officers and directors available to the Company and promptly provide all information required by the Company so that the Company can file all necessary SEC and other regulatory reports as required.

INCORPORATION OF PFL

On September 5, 2013, our wholly owned subsidiary, CCC International Investment Holding Ltd. (“CCC HK”), established Pride Financial Leasing (Suzhou) Co. Ltd. (“PFL”) in Jiangsu Province, China. PFL was expected to offer financial leasing of machinery and equipment, transportation vehicles, and medical devices to municipal government agencies, hospitals and SMEs in Jiangsu Province and beyond. As of September 30, 2016, PFL had two finance lease transactions.

VIE AGREEMENTS WITH PRIDE INFORMATION

On February 19, 2014, WFOE entered into certain contractual arrangements with Mr. Huichun Qin and Pride Information Technology Co. Ltd. (“Pride Information”), a domestic entity established on February 19, 2014 and 100% owned by Mr. Qin. Pursuant to these contractual arrangements, WFOE shall have the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Pride Information, including absolute control rights and the rights to the assets, property and revenue of Pride Information and as a result, approximately 100% of the net income of Pride Information will be paid as a service fee to WFOE.

The contractual arrangements between WFOE, Pride Information and its sole shareholder, Mr. Huichun Qin, have substantially the same terms as those between WFOE, Wujiang Luxiang and its shareholders.

On April 11, 2015, WFOE delivered a notice of termination to Pride Information. As a result, the contractual arrangements between WFOE, Pride Information and Mr. Qin were terminated effective on May 11, 2015 and WFOE no longer controls Pride Information.

Completion of the Internal Review

Based on the Chief Financial Officer’s review of the books and records of the Company, the Company has made a preliminary determination that following the close of the fiscal quarter ended June 30, 2014, RMB 7 million (approximately $1.1 million) was transferred (the “Transfer at Issue”) from the bank account of WFOE, without authorization to the personal account of a former executive officer of the Company, who was still an executive officer at the time of the transfer. The funds were supposed to be used for the purpose of increasing the registered capital account of Wujiang Luxiang. The Company has sought return of the funds but to date has not recovered them. The Company’s Board of Directors explored all means, including legal avenues, to recover the funds and had formed a Special Committee to undertake an internal review of the circumstances surrounding the transfer.

On January 26, 2015, the Special Committee notified the Board of Directors that the internal review surrounding the Transfer at Issue was completed. The internal review confirmed that Mr. Qin transferred RMB 7 million (approximately $1.1 million) from WFOE’s bank account to his personal bank account. The internal review team was unable to interview Mr. Qin. The missing funds have not yet been recovered and the Company has engaged local PRC counsel to assist in the matter.

During the internal review, the independent counsel examined whether other transfers had occurred that were similar to the Transfer at Issue, in that the Company’s funds were transferred to a related party in a manner that was not consistent with the Company’s corporate governance and internal control procedures. The independent counsel identified four transfers made by Mr. Qin that were not consistent with the Company’s corporate governance and internal control procedures. With respect to the first three transfers, all funds were either returned to the Company or applied to the Company’s business. With respect to the fourth transfer, the funds were used to increase the registered capital of Wujiang Luxiang, a variable interest entity the Company controls via a series of contractual arrangements, as intended and reflected in an application made to the PRC government for such increase of registered capital.

The internal review indicated that the Company’s control deficiencies contributed to the Transfer at Issue. The internal review also found that, since the discovery of the Transfer at Issue, the Company has taken various steps to improve its internal controls and procedures, including implementing a new fund transfer approval policy and procedures and new standards of credit risk assessment which are carried out by the newly formed Loan Review Committee. The internal review conducted by independent counsel engaged by the Special Committee of the Board of Directors observed that such new controls and procedures appear to be much more thorough and comprehensive.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation and principle of consolidation

The interim financial information as of September 30, 2016 and for the three and nine months ended September 30, 2016 and 2015 have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC on April 14, 2016.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s financial position as of September 30, 2016, its results of operations for the three and nine months ended September 30, 2016 and 2015, and its cash flows for the nine months ended September 30, 2016 and 2015, as applicable, have been made. The unaudited interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The unaudited interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

The Company has suffered an accumulated deficit of US$69,460,635 as of September 30, 2016. In addition, the Company had working capital (total consolidated current assets exceeding total consolidated current liabilities) of US$2,745,893, as of September 30, 2016. As of September1 30, 2016, the Company had cash and cash equivalents of US$1,167,361, and total short-term borrowings of US$ nil.

These and other factors disclosed in this quarterly report raise substantial doubt as to the Company’s ability to continue as a going concern. Management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, will provide sufficient liquidity to meet the Company obligations for a reasonable period of time.

● Financial Support

The Company is actively seeking other strategic investors with experience in lending business. If necessary, the shareholders of Wujiang Luxiang will contribute more capital into Wujiang Luxiang. On June 8, 2016, the Company closed a private placement with a third-party individual investor to issue 2,439,025 common shares, at a per share price of US$0.41, and raised US$1,000,000 from therefrom. This transaction was at arm’s length. The shares shall be authorized for listing on the NASDAQ capital market, and the net proceeds of the sale of the shares shall be used by the Company for working capital and general corporate purpose. These issued and outstanding shares are deemed a permanent equity of the Company.

● Improvement in Working Capital Management

In order to meet the capital needs for our continued operations, we continue to use our best effort to improve our collection of loan receivable and interest receivable. We engaged four law firms, Jiangsu Zhenyuzhen Law Firm, Jiangsu Tianbian Law Firm, Jiangsu Mingren Law Firm and He-Partners Law Firm to represent us in the legal proceedings against the borrowers and their counter guarantors. Among them, He-Partners Law Firm, is one of the largest law firms in Suzhou City.

While management believes that the measures in the liquidity plan will be adequate to satisfy its liquidity and cash flow requirements for the twelve months ending September 30, 2017, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan will have a material adverse effect on the Company’s business, results of operations and financial position, and may materially adversely affect its ability to continue as a going concern.

All significant inter-company accounts and transactions have been eliminated in consolidation.

(b) Operating segments

ASC 280, Segment Reporting requires companies to report financial and descriptive information about their reportable operating segments, including segment profit or loss, certain specific revenue and expense items, and segment assets. The Company has no reportable segments. All of the Company's activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with registered capital and other borrowings and manage interest rate and credit risk.

The Company has only one reportable segment, which is to provide financial services in the PRC domestic market, primarily in Wujiang City, Jiangsu Province. The Company’s chief operating decision-maker (“CODM”) has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for both the direct lending and guarantee business and the anticipated financial leasing business. The Company’s net revenues are all generated from customers in the PRC. Hence, the Company operates and manages its business without segments. For the three and nine months ended September 30, 2016 and 2015, there was no one customer that accounted for more than 10% of the Company's revenue.

(c) Cash

Cash consists of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains accounts at banks and has not experienced any losses from such concentrations.

(d) Restricted cash

Restricted cash represents cash pledged with banks as guarantor deposit for the guarantee business customers. The banks providing loans to the Company’s guarantee service customers generally require the Company, as the guarantor of the loans, to pledge a cash deposit of 10% to 20% of the guaranteed amount to an escrow account and is restricted from use. The deposits are released after the guaranteed bank loans are paid off and the Company’s guarantee obligation expires which is usually within 12 months.

(e) Loans receivable, net

Loans receivable primarily represent loan amount due from customers. The management has the intent and ability to hold such receivable for the foreseeable future or until maturity or payoff. Loans receivable are recorded at unpaid principal balances, net of allowance for loan losses that reflects the Company’s best estimate of the amounts that will not be collected. Loan origination and commitment fees and certain direct loan origination costs collected from customers are directly recorded in current year interests and fees on loans. The loans receivable portfolio consists of corporate loans and personal loans (Note 6). The Company does not charge loan origination and commitment fees.

(f) Allowance for loan losses

The allowance for loan losses is increased by charges to income and decreased by charge offs (net of recoveries). Recoveries represent subsequent collection of amounts previously charged-off. The increase in allowance for loan losses is the netting effect of “reversal” and “provision” for both business and personal loans. If the ending balance of the allowance for loan losses after any charge offs (net of recoveries) is less than the beginning balance, it will be recorded as a “reversal”; if it is larger, it will be recorded as a “provision” in the allowance for loan loss. The netting amount of the “reversal” and the “provision” is presented in the consolidated statements of operations and comprehensive income (loss).

The Company recognizes a charge-off when management determines that full repayment of a loan is not probable. The primary factor in making that determination is the potential outcome of a lawsuit against the delinquent debtor. The Company will recognize a charge-off when the Company loses contact with the delinquent borrower for more than six months or when the court rules against the Company to seize the collateral asset of the delinquent debt from either the guarantor or borrower.

The allowance for loan losses is maintained at a level believed to be reasonable by management to absorb probable losses inherent in the portfolio as of each balance sheet date. The allowance is based on factors such as the size and current risk characteristics of the portfolio, an assessment of individual loan and actual loss, delinquency, and/or risk rating record within the portfolio (Note 7). The Company evaluates its allowance for loan losses on a quarterly basis or more often as necessary.

(g) Interest receivable

Interest on loans receivable is accrued and credited to income as earned. The Company determines a loan past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days. Additionally, any previously accrued but uncollected interest is reversed. Subsequent recognition of income occurs only to the extent payment is received, subject to management’s assessment of the collectability of the remaining interest and principal. Loans are generally restored to an accrual status when it is no longer delinquent and collectability of interest and principal is no longer in doubt and past due interest is recognized at that time.

The interest reversed due to the above reason was US$3,955,890 and US$2,593,611 as of September 30, 2016 and December 31, 2015, respectively.

(h) Property and equipment

The property and equipment are stated at cost less accumulated depreciation. The depreciation is computed on a straight-line method over the estimated useful lives of the assets with 5% salvage value. Estimated useful lives of property and equipment are stated in Note 12.

The Company eliminates the cost and related accumulated depreciation of assets sold or otherwise retired from the accounts and includes any gain or loss in the statement of income. The Company charges maintenance, repairs and minor renewals directly to expenses as incurred; major additions and betterment to equipment are capitalized.

(i) Impairment of long-lived assets

The Company applies the provisions of ASC No. 360 Sub topic 10, "Impairment or Disposal of Long-Lived Assets"(ASC 360- 10) issued by the Financial Accounting Standards Board ("FASB"). ASC 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

The Company tests long-lived assets, including property and equipment and finite lived intangible assets, for impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the net carrying amount is greater than its fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows as the rate the Company utilizes to evaluate potential investments. The Company estimates fair value based on the information available in making whatever estimates, judgments and projections are considered necessary. There were no impairment losses in the three and nine months ended September 30, 2016 and 2015.

(j) Fair values of financial instruments

ASC Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Topic 825 excludes certain financial instruments and all nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company.

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

As of September 30, 2016 and December 31, 2015, financial instruments of the Company primarily comprise of cash, restricted cash, notes receivable, loan receivables, other receivable, short-term bank loans, deposits payable and accrued expenses, which were carried at cost on the consolidated balance sheets, and carrying amounts approximated their fair values because of their generally short maturities.

(k) Foreign currency translation and transaction

The reporting currency of the Company is United States Dollars (“US$”), which is also the Company’s functional currency. The PRC subsidiaries and VIEs maintain their books and records in its local currency, the Renminbi Yuan (“RMB”), which is their functional currencies as being the primary currency of the economic environment in which these entities operate.

For financial reporting purposes, the financial statements of the Company prepared using RMB, are translated into the Company’s reporting currency, United States Dollars, at the exchange rates quoted by www.oanda.com. Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and shareholders’ equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in shareholders’ equity.

	September 30,  2016		December 31,  2015
Balance sheet items, except for equity accounts		6.6702		6.4917

	For the nine months ended  September 30,
	2016		2015
Items in the statements of income and comprehensive income, and statements of cash flows		6.5802		6.1735

Transactions denominated in currencies other than the functional currency are translated into prevailing functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the consolidated statements of comprehensive loss.

(l) Use of estimates

The preparation of consolidated financial statements in conformity with 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 period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the financial statements include: (i) the allowance for doubtful debts; (ii) estimates of losses on unexpired loan contracts and guarantee service contracts; (iii) accrual of estimated liabilities; (iv) useful lives of long-lived assets; (v) the impairment of long-lived assets; (vi) the valuation allowance of deferred tax assets; and (vii) contingencies and litigation.

(m) Revenue recognition

Revenue is recognized when there are probable economic benefits to the Company and when the revenue can be measured reliably, on the following:

● Interest income on loans. Interest on loan receivables is accrued monthly in accordance with their contractual terms and recorded in accrued interest receivable. The Company does not charge prepayment penalty from customers. Additionally, any previously accrued but uncollected interest is discontinued of accrual and reversed, when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days.

● Commission on guarantee service. The Company receives the commissions from guarantee services in full at inception and records as unearned income before amortizing it throughout the period of guarantee.

● Income on direct financing lease. The financing agreements are classified as direct financing lease as prescribed by the Financial Accounting Standards Board ("FASB Codification"). Revenues representing the capitalized costs of the investment are recognized as income upon inception of the leases. The portion of revenues representing the difference between the gross investment in the lease (the sum of the minimum lease payments and the guaranteed residual value, if any) and the sum of the present value of the two components is recorded as unearned income and amortized over the lease term

Taxes assessed by governmental authorities that are directly imposed on revenue-producing transactions between the Company and its customers (which may include, but are not limited to, sales, use, value added and some excise taxes) are excluded from revenues.

Lessees are responsible for all taxes, insurance and maintenance costs.

● Non-interest income. Non-interest income mainly includes rental income from the sub-leasing of certain of the Company’s leased office space to third parties and income from disposal of property and equipment

(n) Financial guarantee service contract

Financial guarantee service contracts provides guarantee which protects the holder of a debt obligation against default. Pursuant to such guarantee, the Company makes payments if the obligor responsible for making payments fails to do so as scheduled.

The contract amounts reflect the extent of involvement the Company has in the guarantee transaction and also represent the Company’s maximum exposure to credit loss in its guarantee business.

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. Financial instruments representing credit risk are as follows:

	September 30, 2016  (Unaudited)		December 31,  2015
Guarantee	$	11,341,455	$	11,653,342

A provision for possible loss to be absorbed by the Company for the financial guarantee it provides is recorded as an accrued liability when the guarantees are made and recorded as “Accrual for financial guarantee services” on the consolidated balance sheets. This liability represents probable losses and is increased or decreased by accruing a “(Provision of)/Reversal of provision for financial guarantee services” against the income of commissions and fees on guarantee services reserve.

This is done throughout the life of the guarantee, as necessary when additional relevant information becomes available. The methodology used to estimate the liability for possible guarantee loss considers the guarantee contract amount and a variety of factors, which include, depending on the counterparty, latest financial position and performance of the borrowers, actual defaults, estimated future defaults, historical loss experience, estimated value of collaterals or guarantees the customers or third parties offered, and other economic conditions such as the economy trend of the area and the country. The estimates are based upon currently available information.

Based on the past experience and expected customer default status of financial guarantee services, the Company estimates the probable loss for immature financial guarantee services to be approximately 50% or 100% of contract amount as of September 30, 2016 and December 31, 2015, and made a provision of US$6,015,092 and US$5,691,253 as of these two reporting dates, respectively, for possible credit risk of its guarantees. In addition, the Company accrued specific provisions for repayment on behalf of guarantee customers who defaulted on their loans, in the amount of US$12,294,889 and US$13,631,304 as of September 30, 2016 and December 31, 2015, respectively. The total accrual for financial guarantee services amounted to US$18,309,981 and US$19,322,557 as of September 30, 2016 and December 31, 2015, respectively. The Company reviews the provision on a quarterly basis.

The Company provided provision of US$385,352 and reversed provision of US$9,035,700 for the nine months ended September, 2016 and 2015, respectively. The provision for the financial guarantee services was US$599,808 and US$7,322,936 for the three months ended September 30, 2016 and 2015, respectively.

During nine months ended September 30, 2016 and December 31, 2015, the management charged off specific provision for one and one customer in the amount of US$116,856 and US$262,422, considering remote collectability from the customers. The Company charged off US $Nil and US$262,422 for the three months ended September 30, 2016 and 2015, respectively.

(o) Non-interest expenses

Non-interest expenses primarily consist of salary and benefits for employees, traveling cost, entertainment expenses, depreciation of equipment, office rental expenses, professional service fee, office supplies, etc.

(p) Income tax

Current income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the liability approach. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income.

(q) Comprehensive income

Comprehensive income includes net income and foreign currency adjustments. Comprehensive income is reported in the statements of operations and comprehensive income.

Accumulated other comprehensive income, as presented on the balance sheets are the cumulative foreign currency translation adjustments.

(r) Share-based awards

Share-based awards granted to the Company's employees are measured at fair value on grant date and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares.

At each date of measurement, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including but not limited to the fair value of the underlying shares, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the share-based awards changes significantly, share-based compensation expense may differ materially in the future from that recorded in the current reporting period.

(s) Operating leases

The Company leases its principal office under a lease agreement that qualifies as an operating lease. The Company records the rental under the lease agreement in the operating expense when incurred.

(t) Commitments and contingencies

In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450 Sub topic 20, “Loss Contingencies”, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

(u) Recently issued accounting standards

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company is evaluating this ASU and has not determined the effect of this standard on its ongoing financial reporting.

In June 2016, the FASB issued new accounting guidance for recognition of credit losses on financial instruments, which is effective January 1, 2020, with early adoption permitted on January 1, 2019. The guidance introduces a new credit reserving model known as the Current Expected Credit Loss (CECL) model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information and will likely result in earlier recognition of credit reserves. Credco does not intend to adopt the new standard early and is currently evaluating the impact the new guidance will have on its financial position, results of operations and cash flows; however, it is expected that the new CECL model will alter the assumptions used in calculating credit losses on Card Member receivables and loans, among other financial instruments, and may result in material changes to Credco’s credit reserves.

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Variable Interest Entities and Other Consolidation Matters

9 Months Ended

Sep. 30, 2016

Variable Interest Entities and Other Consolidation Matters [Abstract]

VARIABLE INTEREST ENTITIES AND OTHER CONSOLIDATION MATTERS

3. VARIABLE INTEREST ENTITIES AND OTHER CONSOLIDATION MATTERS

On September 26, 2012, the Company, through WFOE, entered into a series of contractual arrangements, also known as “VIE Agreements” with Wujiang Luxiang and the Wujiang Luxiang Shareholders.

On February 19, 2014, WFOE entered into certain contractual arrangements, having substantially the same terms as those of the VIE Agreements with Pride Information and its sole shareholder, Mr. Huichun Qin. These VIE Agreements were terminated on May 11, 2015 and will be accounted for as a deconsolidation. Pride Information did not have any business since its inception. (See Note 1)

As of September 30, 2016, the Company had only one VIE.

The significant terms of the VIE Agreements are summarized in Note 1.

VIEs are entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. WFOE is deemed to have a controlling financial interest and be the primary beneficiary of the entities mentioned in Note 1 above, because it has both of the following characteristics:

1. power to direct activities of a VIE that most significantly impact the entity’s economic performance, and

2. obligation to absorb losses of the entity that could potentially be significant to the VIE or right to receive benefits from the entity that could potentially be significant to the VIE.

In addition, as all of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through either arbitration or litigation in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company’s ability to enforce these contractual arrangements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these contractual arrangements, it may not be able to exert effective control over Wujiang Luxiang and Pride Information and its ability to conduct its business may be materially and adversely affected.

All of the Company’s main current operations are conducted through Wujiang Luxiang and PFL. Current regulations in China permit Wujiang Luxiang and PFL to pay dividends to us only out of its accumulated distributable profits, if any, determined in accordance with their articles of association and PRC accounting standards and regulations. The ability of Wujiang Luxiang and PFL to make dividends and other payments to the Company may be restricted by factors including changes in applicable foreign exchange and other laws and regulations.

The following financial statement amounts and balances of the VIE were included in the unaudited consolidated financial statements as of September 30, 2016 and audited consolidated financial statements as of December 31, 2015 and for the three and nine months ended September 30, 2016 and 2015:

	September 30, 2016  (Unaudited)		December 31, 2015
Total assets	$	20,216,911	$	22,920,730
Total liabilities	$	20,267,692	$	23,932,841

	For the three months ended September 30,					For the nine months ended September 30,
	2016  (Unaudited)		2015  (Unaudited)			2016  (Unaudited)		2015  (Unaudited)
Revenue	$	672,646	$	120,929		$	1,151,308	$	2,272,057
Net income/(loss)	$	2,807	$	(36,925,013	)	$	910,203	$	(40,083,818	)

All of the Company’s current revenue is generated in RMB. Any future restrictions on currency exchanges may limit our ability to use net revenues generated in RMB to make dividends or other payments in US$ or fund possible business activities outside China.

Foreign currency exchange regulation in China is primarily governed by the following rules:

● Foreign Exchange Administration Rules (1996), as amended in August 2008, or the Exchange Rules;

● Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.

Under the Administration Rules, RMB is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service related foreign exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities outside of China, unless the prior approval of the State Administration of Foreign Exchange (“SAFE”) is obtained and prior registration with the SAFE is made. Foreign-invested enterprises like WFOE that need foreign currency for the distribution of profits to their shareholders may validate payment from their foreign currency accounts or purchase and pay foreign currencies at the designated foreign exchange banks to their foreign shareholders by producing board resolutions for such profit distribution. Based on their needs, foreign invested enterprises are permitted to open foreign currency settlement accounts for current account receipts and payments of foreign exchange along with specialized accounts for capital account receipts and payments of foreign currency at certain designated foreign exchange banks.

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Risks

9 Months Ended

Sep. 30, 2016

Risks [Abstract]

RISKS

4. RISKS

(a) Credit risk

Credit risk is one of the most significant risks for the Company’s business. Credit risk exposures arise principally in lending activities, finance lease and financial guarantee activities which is an off-balance sheet financial instrument.

Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Company manages credit risk through in-house research and analysis of the Chinese economy and the underlying obligors and transaction structures. To minimize credit risk, the Company requires collateral in the form of rights to cash, securities or property and equipment.

The Company identifies credit risk collectively based on industry, geography and customer type. This information is monitored regularly by management.

1.1 Lending activities

In measuring the credit risk of lending loans to corporate customers, the Company mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the exposures to the customer and its likely future development. For individual customers, the Company uses standard approval procedures to manage credit risk for personal loans.

In addition, the Company calculates the provision amount as below:

1. General Reserve - is based on total loan receivable balance and to be used to cover unidentified probable loan loss. According to management assessment, the General Reserve is required to be no less than 1% of total loan receivable balance.

2. Special Reserve - is fund set aside covering losses due to risks related to a particular country, region, industry, company or type of loans. The reserve rate could be decided based on management estimate of loan collectability. The Loan portfolio did not include any loans outside of the PRC.

3. Specific Reserve – is based on a loan by loan basis covering losses due to risks related to the ability and intension of repayment of each customer. The reserve rate was individually assessed based on management estimate of loan collectability.

1.2 Guarantee activities

The off-balance sheet commitments arising from guarantee activities carry similar credit risk to loans and the Company takes a similar approach on risk management.

Off-balance sheet commitments with credit exposures are also assessed and categorized with reference to the Guideline and include additional amounts on a specific basis.

(b) Liquidity risk

The Company is also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

(c) Foreign currency risk

A majority of the Company’s operating activities and a significant portion of the Company’s assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers' invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

(d) Concentration risk

As of September 30, 2016 and December 31, 2015, the Company held cash of US$1,167,361 and US$306,401, respectively, that is uninsured by the government authority.

To limit exposure to credit risk relating to deposits, the Company primarily places cash deposits only with large financial institutions in the PRC with acceptable credit ratings.

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

No customer accounted for more than 10% of total loan balance as of September 30, 2016 and December 31, 2015.

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Restricted Cash

9 Months Ended

Sep. 30, 2016

Restricted Cash [Abstract]

RESTRICTED CASH

5. RESTRICTED CASH

Restricted cash represents cash pledged with banks as guarantor deposit for the Company's guarantee service customers. The banks providing loans to the Company’s guarantee service customers generally require the Company, as the guarantor of the loans, to pledge a cash deposit usually in the range of 10% to 30% of the guaranteed amount. The deposits are released after the guaranteed bank loans are paid off and the Company’s guarantee obligation expires which is usually within 12 months. However, due to high default rate in the financial guarantee services, the Company narrowed its financial guarantee business from the year ended December 31, 2015. As a result, the Company did not continue guarantor agreements with banks and was not subject to restrictions on deposits in banks. As of September 30, 2016 and December 31, 2015, the balances of restricted cash were minimal, amounting to US$0.01 million and US$0.4 million, respectively.

At the same time, the Company requires the guarantee service customers to make a deposit to the Company of the same amount as the deposit the Company pledged to the banks for their loans. The Company recorded the deposit received as “deposits payable” on the unaudited consolidated balance sheet. The deposit is returned to the customer after the customer repays the bank loan and the Company’s guarantee obligation expires.

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Loans Receivable, Net

9 Months Ended

Sep. 30, 2016

Loans Receivable, Net [Abstract]

LOANS RECEIVABLE, NET

6. LOANS RECEIVABLE, NET

The interest rates on loan issued ranged between 9.6%~ 19.44% and 9.6%~ 19.44% % for the nine months ended September 30, 2016 and 2015, respectively.

6.1 Loans receivable consist of the following:

	September 30, 2016  (Unaudited)			December 31, 2015
Business loans	$	37,913,015		$	40,498,813
Personal loans		21,627,323			22,577,907
Total Loans receivable		59,540,338			63,076,720
Allowance for loan losses
Collectively assessed		(54,104,303	)		(55,595,653	)
Individually assessed		-			-
Allowance for loan losses		(54,104,303	)		(55,595,653	)
Loans receivable, net	$	5,436,035		$	7,481,067

The Company originates loans to customers located primarily in Wujiang City, Jiangsu Province. This geographic concentration of credit exposes the Company to a higher degree of risk associated with this economic region.

All loans are short-term loans that the Company has made to either business or individual customers. As of September 30, 2016 and December 31, 2015, the Company had 66 and 68 business loan customers, and 42 and 47 personal loan customers, respectively. Most loans are either guaranteed by a third party whose financial strength is assessed by the Company to be sufficient or secured by collateral. Allowance on loan losses are estimated loan by loan on a quarterly basis based on an assessment of specific evidence indicating doubtful collection, historical experience, loan balance aging and prevailing economic conditions.

For the three months ended September 30, 2016 and 2015, a reversal of provision of US$226,694 and a provision of US$29,210,186 were charged to the consolidated statement of income, respectively. For the nine months ended September 30, 2016 and 2015, a reversal of provision of US$133,177 and a provision of US$30,762,076 were charged to the consolidated statement of income, respectively. No Write-offs against allowances have occurred for the three and nine months ended September 30, 2016 and 2015, respectively.

Interest on loans receivable is accrued and credited to income as earned. The Company determines a loan's past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days.

The following table presents nonaccrual loans with aging over 90 days by classes of loan portfolio as of September 30, 2016 and December 31, 2015, respectively:

	September 30, 2016  (Unaudited)		December 31, 2015
Business loans	$	28,914,735	$	21,907,409
Personal loans		11,867,525		10,211,501
	$	40,782,260	$	32,118,910

The following table represents the aging of loans as of September 30, 2016 by type of loan:

	1-89 Days Past Due  (Unaudited)		90 - 179 Days Past Due  (Unaudited)			180 - 365 Days Past Due  (Unaudited)		Over 1 year Past Due  (Unaudited)			Total Past Due  (Unaudited)			Current  (Unaudited)			Total Loans  (Unaudited)
Business loans	$	8,998,280	$	4,950,601		$	7,080,726		16,883,408		$	37,913,015		$	-		$	37,913,015
Personal loans		9,714,822		-			4,627,883		7,239,642			21,582,347			44,976			21,627,323
	$	18,713,102	$	4,950,601	$	11,708,609		24,123,050		$	59,495,362		$	44,976		$	59,540,338

The following table represents the aging of loans as of December 31, 2015 by type of loan:

	1-89 Days Past Due		90 - 179 Days Past Due		180 - 365 Days Past Due		Over 1 year Past Due		Total Past Due		Current		Total Loans
Business loans	$	77,021	$	4,313,200	$	7,555,846		10,038,363	$	21,984,430	$	18,514,383	$	40,498,813
Personal loans		924,257		1,848,514		3,749,403		4,613,584		11,135,758		11,442,149		22,577,907
	$	1,001,278	$	6,161,714	$	11,305,249		14,651,947	$	33,120,188	$	29,956,532	$	63,076,720

6.2 Analysis of loans by credit quality indicator

The following table summarizes the Company’s loan portfolio by credit quality indicator as of September 30, 2016 and December 31, 2015, respectively:

Five Categories	September 30, 2016  (Unaudited)		%			December 31, 2015		%
Pass	$	-		-		$	-		-
Special mention		-		-			-		-
Substandard		-		-			2,695,750		4.3	%
Doubtful		10,872,069		18.3	%		9,841,658		15.6	%
Loss		48,668,269		81.7	%		50,539,312		80.1	%
Total	$	59,540,338		100	%	$	63,076,720		100	%

6.3 Analysis of loans by collateral

The following table summarizes the Company’s loan portfolio by collateral as of September 30, 2016:

	September 30, 2016  (Unaudited)
	Business Loans		Personal Loans		Total
Guarantee backed loans	$	35,592,373	$	20,760,785	$	56,353,158
Pledged assets backed  loans		2,320,642		866,538		3,187,180
Collateral backed loans		-		-		-
	$	37,913,015	$	21,627,323	$	59,540,338

The following table summarizes the Company’s loan portfolio by collateral as of December 31, 2015:

	December 31, 2015
	Business Loans		Personal Loans		Total
Guarantee backed loans	$	37,498,183	$	21,510,390	$	59,008,573
Pledged assets backed  loans		3,000,630		1,067,517		4,068,147
Collateral backed loans		-		--		-
	$	40,498,813	$	22,577,907	$	63,076,720

Collateral Backed Loans

A collateral backed loan is a loan in which the borrower puts up an asset under their ownership, possession or control, as collateral for the loan. An asset usually is land use rights, inventory, equipment or buildings. The loan is secured against the collateral and we do not take physical possession of the collateral at the time the loan is made. We will verify ownership of the collateral and then register the collateral with the appropriate government agencies to complete the secured transaction. In the event that the borrower defaults, we can then take possession of the collateral asset and sell it to recover the outstanding balance owed. If the sale proceed of the collateral asset is not sufficient to pay off the debt, we will file a lawsuit against the borrower and seek payment for the remaining balance.

Pledged Asset Backed Loans

Pledged loans are loans with pledged assets. The pledged assets are usually certificates of deposit. Lenders take physical possession of the pledged assets at the time the loan is made and do not need to register them with government agencies to secure the loan. If the borrower defaults, we can sell the assets to recover the outstanding balance owed.

Both collateral loans and pledged loans are considered secured loans. The amount of a loan that lenders provide depends on the value of the collateral pledged. Beginning 2011, the Company does not provide unsecured loans.

Guarantee Backed Loans

A guaranteed loan is a loan guaranteed by a third party who is usually a corporation or high net worth individual. As of September 30, 2016 and December 31, 2015, guaranteed loans make up 94.6% and 93.6% of our direct loan portfolio, respectively.

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Allowance for Loan Losses

9 Months Ended

Sep. 30, 2016

Allowance for Loan Losses [Abstract]

ALLOWANCE FOR LOAN LOSSES

7. ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss history, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The allowance is calculated at portfolio-level since our loans portfolio is typically of smaller balance homogenous loans and is collectively evaluated for impairment. Additionally, the management also reviewed the portfolio on a loan by loan basis and individually evaluated for impairment if any.

For the purpose of calculating portfolio-level reserves, we have grouped our loans into two portfolio segments: Corporate and Personal. The allowance consists of the combination of a quantitative assessment component based on statistical models, a retrospective evaluation of actual loss information to loss forecasts, value of collaterals and could include a qualitative component based on management judgment.

In estimating the probable loss of the loan portfolio, the Company also considers qualitative factors such as current economic conditions and/or events in specific industries and geographical areas, including unemployment levels, trends in real estate values, peer comparisons, and other pertinent factors such as regulatory guidance. Finally, as appropriate, the Company also considers individual borrower circumstances and the condition and fair value of the loan collateral, if any.

In addition, the Company calculates the provision amount as below:

1. General Reserve - is based on total loan receivable balance and to be used to cover unidentified probable loan loss. The management assessed the General Reserve is required  to be no less than 1% of total loan receivable balance.

2. Special Reserve - is fund set aside covering losses due to risks related to a particular country, region, industry, company or type of loans. The reserve rate could be decided based on management estimate of loan collectability. The Loan portfolio did not include any loans outside of the PRC.

While management uses the best information available to make loan loss allowance evaluations, adjustments to the allowance may be necessary based on changes in economic and other conditions or changes in accounting guidance.

The following tables present the activity in the allowance for loan losses and related recorded investment in loans receivable by classes of the loans individually and collectively evaluated for impairment as of and for the three months ended September 30, 2016 and 2015:

	Business Loans  (Unaudited)			Personal Loans  (Unaudited)			Total  (Unaudited)
For the three months ended September 30, 2016
Beginning balance	$	34,326,727		$	20,161,476		$	54,488,203
Charge-offs		-			-			-
Recoveries		(50,612	)		(121,435	)		(172,047	)
Provisions		(360	)		-			(360	)
Foreign exchange impact		(133,237	)		(78,256	)		(211,493	)
Ending balance		34,142,518			19,961,785			54,104,303
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	34,142,518		$	19,961,785		$	54,104,303

	Business Loans  (Unaudited)			Personal Loans  (Unaudited)			Total  (Unaudited)
For the three months ended September 30, 2015
Beginning balance	$	16,598,522		$	9,597,444		$	26,195,966
Charge-offs		(26,341,752	)		(14,792,268	)		(41,134,020	)
Recoveries		-			-			-
Provisions		18,839,288			10,275,122			29,114,410
Ending balance		9,096,058			5,080,298			14,176,356
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	9,096,058		$	5,080,298		$	14,176,356

The following tables present the activity in the allowance for loan losses and related recorded investment in loans receivable by classes of the loans individually and collectively evaluated for impairment as of and for the nine months ended September 30, 2016 and 2015:

	Business Loans  (Unaudited)			Personal Loans  (Unaudited)			Total  (Unaudited)
For the nine months ended September 30, 2016
Beginning balance	$	35,083,738		$	20,511,915		$	55,595,653
Charge-offs					-			-
Recoveries		(127,977	)		(1,155	)		(129,132	)
Provisions		125,729			-			125,729
Foreign exchange impact		(938,972	)		(548,975	)		(1,487,947	)
Ending balance		34,142,518			19,961,785			54,104,303
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	34,142,518		$	19,961,785		$	54,104,303

	Business Loans  (Unaudited)			Personal Loans  (Unaudited)			Total  (Unaudited)
For the nine months ended September 30, 2015
Beginning balance	$	14,836,650		$	9,654,071		$	24,490,721
Charge-offs		(26,341,752	)		(14,792,268	)		(41,134,020	)
Recoveries		-			(56,627	)		(56,627	)
Provisions		20,601,160			10,275,122			30,876,282
Ending balance		9,096,058			5,080,298			14,176,356
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	9,096,058		$	5,080,298		$	14,176,356

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful and loss within the Company's internal risk rating system as of September 30, 2016:

	Pass  (Unaudited)		Special Mention  (Unaudited)		Substandard  (Unaudited)		Doubtful  (Unaudited)		Loss  (Unaudited)		Total  (Unaudited)
Business loans	$	-	$	-	$	-	$	7,540,994	$	30,372,021	$	37,913,015
Personal loans		-		-		-		3,331,075		18,296,248		21,627,323
	$	-	$	-	$	-	$	10,872,069	$	48,668,269	$	59,540,338

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful and loss within the Company's internal risk rating system as of December 31, 2015:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Business loans	$	-	$	-	$	2,618,729	$	6,103,192	$	31,776,892	$	40,498,813
Personal loans		-		-		77,021		3,738,466		18,762,420		22,577,907
	$	-	$	-	$	2,695,750	$	9,841,658	$	50,539,312	$	63,076,720

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Loan Impairment

9 Months Ended

Sep. 30, 2016

Loan Impairment [Abstract]

LOAN IMPAIRMENT

8. LOAN IMPAIRMENT

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for corporate and personal loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. Currently, estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral which approximates to the carrying value due to the short term nature of the loans.

Loans with modified terms are classified as troubled debt restructurings if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a temporary below market rate reduction in interest rate or an extension of a loan’s stated maturity date. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification. Loans classified as troubled debt restructurings are designated as impaired.

Even though the Company allows a one-time loan extension with a period up to the original loan period, which is usually twelve months. Such extension is not considered to be a troubled debt restructuring because the Company does not grant a concession to borrowers. The principal of the loan remains the same and the interest rate is fixed at the current interest rate at the time of extension. Therefore, there were no troubled debt restructurings during the three and nine months ended September 30, 2016 and 2015, respectively.

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Guarantee Paid on Behalf of Guarantee Customers

9 Months Ended

Sep. 30, 2016

Guarantee Paid on Behalf of Guarantee Customers [Abstract]

GUARANTEE PAID ON BEHALF OF GUARANTEE CUSTOMERS

9. GUARANTEE PAID ON BEHALF OF GUARANTEE CUSTOMERS

	September 30, 2016  (Unaudited)		December 31, 2015
Guarantee paid on behalf of guarantee service customers	$	12,147,982	$	14,031,603
Guarantee paid on behalf of a related party		324,005		622,807
Total	$	12,471,987	$	14,654,410

As of September 30, 2016 and December 31, 2015, guarantee paid on behalf of guarantee service customers represents payment made by the Company to banks on behalf of thirty-three and thirty-two of its guarantee service customers who defaulted on their loan repayments to the banks. Management performs an evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss history, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. As of September 30, 2016 and December 31, 2015, the Company accrued allowance on the balance in “accrual for financial guarantee services” in the value of US$18,309,981 and US$19,322,557, respectively.

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Other Assets

9 Months Ended

Sep. 30, 2016

Other Assets [Abstract]

OTHER ASSETS

10. OTHER ASSETS

Other assets as of September 30, 2016 and December 31, 2015consisted of:

	September 30, 2016  (Unaudited)		December 31, 2015
Other prepaid expense		11,993		30,809
Deposit for court filing fees and legal fees		219,595		222,934
Other receivables		45,815		39,457
	$	277,403	$	293,200

Deposit for court filing fees and legal fees will be claimed from default customers.

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Net Investment in Direct Financing Lease

9 Months Ended

Sep. 30, 2016

Net Investment in Direct Financing Lease [Abstract]

NET INVESTMENT IN DIRECT FINANCING LEASE

11. NET INVESTMENT IN DIRECT FINANCING LEASE

On September 25, 2014, PFL entered into a finance lease agreement for the leasing of manufacturing equipment with a total lease receivable of US$2.73 million, with a lease term of 2 years. The lease bears an interest rate of 10.36% per annum.

On October 13, 2014, PFL entered into another finance lease agreement for the leasing of manufacturing equipment with a total lease receivable of US$2.88 million. The lease bears an interest rate of 11.11% per annum.

Future minimum lease receipts under non-cancellable finance lease arrangements are as follows:

	September 30, 2016  (Unaudited)			December 31, 2015
Within 1 year	$	3,674,541		$	3,635,411
2 years		73,461			754,810
3 years		-			-
Total minimum lease receipts		3,748,002			4,390,221
Less: amount representing interest		(298,822	)		(464,100	)
Present value of minimum lease receipts	$	3,449,180		$	3,926,121

Following is a summary of the components of the Company’s net investment in direct financing leases as of September 30, 2016 and December 31, 2015:

	September 30, 2016  (Unaudited)			December 31, 2015
Total minimum lease payments to be received	$	3,748,002		$	4,390,221
Less: Amounts representing estimated executory costs		-			-
Minimum lease payments receivable		3,748,002			4,390,221
Less Allowance for uncollectible		(2,542,163	)		(2,857,554	)
Net minimum lease payments receivable		1,205,839			1,532,667
Estimated residual value of leased property		-			-
Less: Unearned income		(298,822	)		(355,255	)
Net investment in direct financing lease	$	907,017		$	1,177,442

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Property and Equipment

9 Months Ended

Sep. 30, 2016

Property and Equipment [Abstract]

PROPERTY AND EQUIPMENT

12. PROPERTY AND EQUIPMENT

The Company’s property and equipment used to conduct day-to-day business are recorded at cost less accumulated depreciation. Depreciation expenses are calculated using straight-line method over the estimated useful life with 5% salvage value below:

Property and equipment consist of the following:

	Useful Life  (years)		September 30, 2016  (Unaudited)			December 31, 2015
Furniture and fixtures		5	$	21,665		$	22,260
Vehicles		4		-			153,288
Electronic equipment		3		136,719			140,001
Leasehold improvement		3		297,563			86,418
Less: accumulated depreciation				(335,454	)		(275,847	)
Property and equipment, net			$	120,493		$	126,120

During the nine months ended September 30, 2016, the Company disposed of one vehicle with net book value of US$7,459 (original cost of US$149,186, accumulated depreciation of US$141,727). The Company generated non-interest income of US$48,945 from the disposal.

During the nine months ended September 30, 2015, the Company disposed of two vehicles with net book value of US$4,073 (original cost of US$81,459, accumulated depreciation of $77,386). The Company generated non-interest income of US$14,585 from the disposal.

Depreciation expense totaled US$11,053 and US$27,107 for the three months ended September 30, 2016 and 2015, respectively. Depreciation expense totaled US$43,062 and US$81,245 for the nine months ended September 30, 2016 and 2015, respectively.

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Intangible Assets

9 Months Ended

Sep. 30, 2016

Intangible Assets [Abstract]

INTANGIBLE ASSETS

13. INTANGIBLE ASSETS

Intangible asset represents the software used for P2P platform, the useful life is estimated at 3 years.

	Useful Life  (years)	September 30, 2016  (Unaudited)		December 31, 2015
Software	3	$	969	$	4,435

Amortization expense totaled US$1,115 and US$1,205 for the three months ended September 30, 2016 and 2015, respectively. Amortization expense totaled US$3,393 and US$8,596 for the nine months ended September 30, 2016 and 2015, respectively.

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Short-Term Bank Loans

9 Months Ended

Sep. 30, 2016

Short-Term Bank Loans [Abstract]

SHORT-TERM BANK LOANS

14. SHORT-TERM BANK LOANS

Bank Name	Interest rate	Term		September 30,  2016  (Unaudited)		December 31, 2015
Agricultural Bank Of China	Fixed annual rate of 6.31%		From October 30, 2015 to October 30, 2016		-		2,618,729
				$	-	$	2,618,729

During the nine months ended September 30, 2016, the Company repaid the all outstanding bank borrowings. As of September 30, 2016, the Company did not have bank loans.

As of December 31, 2015, the short-term bank loans have maturity terms within 1 year. These loans were guaranteed by the Wujiang Luxiang Shareholders.

Interest expense incurred on short-term loans for the three months ended September 30, 2016 and 2015 were US$nil and US$152,664, respectively. Interest expense incurred on short-term loans for the nine months ended September 30, 2016 and 2015 were US$30,057 and US$325,830, respectively.

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Deposits Payable

9 Months Ended

Sep. 30, 2016

Deposits Payable [Abstract]

DEPOSITS PAYABLE

15. DEPOSITS PAYABLE

Deposits payable are security deposits required from customers in order to obtain loans and guarantees from the Company. The deposits are refundable to the customers when the customers fulfill their obligations under loan and guarantee contracts. 

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Unearned Income from Guarantee Services and Financing Lease Services

9 Months Ended

Sep. 30, 2016

Unearned Income from Guarantee Services and Financing Lease Services [Abstract]

UNEARNED INCOME FROM GUARANTEE SERVICES AND FINANCING LEASE SERVICES

16. UNEARNED INCOME FROM GUARANTEE SERVICES AND FINANCING LEASE SERVICES

The Company receives guarantee commissions in full at the inception and records unearned income before amortizing it throughout the guarantee service life. Unearned income from guarantee services was US$12,044 and $1,610 as of September 30, 2016 and December 31, 2015, respectively.

The Company receives financing leasing service commissions at the inception and records unearned income before amortizing it throughout the guarantee service life. Unearned income from financing leasing services was US$24,362 and US$59,692 as of September 30, 2016 and December 31, 2015, respectively.

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Other Current Liabilities

9 Months Ended

Sep. 30, 2016

Other Current Liabilities [Abstract]

OTHER CURRENT LIABILITIES

17. OTHER CURRENT LIABILITIES

Other current liabilities as of September 30, 2016 and December 31, 2015 consisted of:

	September 30, 2016  (Unaudited)			December 31, 2015
Accrued payroll	$	30,938		$	85,144
Accrued office rental expenses		52,472			61,617
Other accrued expenses		24,930			-
Other tax (recoverable)/payable		(46,241	)		14,187
Accrued provision for cash settlement against legal proceedings		225,000			-
Other payable		9,960			21,294
	$	297,059		$	182,242

On April 22, 2016, we filed a stipulation and agreement of settlement ("Stipulation") with all persons and entities that purchased or otherwise acquired CCCR shares between August 14, 2013 and July 25, 2014 (collectively "Led Defendants). Pursuant to the Stipulation, CCCR shall cause (a) $225,000 to be transferred to the Escrow Agent within fifteen (15) business days of the later of: (i) the Court’s entry of the Order for Notice and Hearing (or substantially similar order) as set forth in this Stipulation; or (ii) Lead Counsel provision to Settling Defendants’ Counsel of written payment instructions and a completed W-9 form; and (b) Cause CCCR to issue 750,000 shares of freely tradeable shares of CCCR common stock (the “Settlement Stock”) to the Escrow Agent within fifteen (15) business days of the Court’s entry of the Order for Notice and Hearing (or substantially similar order) as set forth in this Stipulation. In the opinion of management, it is highly probable for the Company to settle such a Stipulation. The Company accounted for the cash settlement of $225,000 as an accrued liability and the share settlement of 750,000 shares as an additional paid-in capital.

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Other Operating Expense

9 Months Ended

Sep. 30, 2016

Other Operating Expense [Abstract]

OTHER OPERATING EXPENSE

18. OTHER OPERATING EXPENSE

Other operating expense for the three and nine months ended September 30, 2016 and 2015 consisted of:

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Depreciation and amortization	$	12,168	$	27,829	$	46,455	$	89,841
Travel expenses		9,647		1,807		13,134		7,669
Entertainment expenses		42		334		11,970		15,604
Promotion expenses		-		-		-		260
Legal and consulting expenses		1,002,804		164,573		1,642,316		998,094
Car expenses		3,726		12,897		21,541		40,813
Bank charges		540		10,613		2,256		33,011
Audit-related expense		31,382		25,329		100,955		255,779
Provision for settlement against legal proceedings		-		-		690,000		-
Other expenses		25,783		104,712		54,400		251,252
Total	$	1,086,092	$	348,094	$	2,583,027	$	1,692,323

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Employee Retirement Benefit

9 Months Ended

Sep. 30, 2016

Employee Retirement Benefit [Abstract]

EMPLOYEE RETIREMENT BENEFIT

19. EMPLOYEE RETIREMENT BENEFIT

The Company has made employee benefit contribution in accordance with relevant Chinese regulations, including retirement insurance, unemployment insurance, medical insurance, housing fund, work injury insurance and maternity insurance. The Company recorded the contribution in the salary and employee charges when incurred. The contributions made by the Company were US$4,532 and US$15,109 for the three months ended September 30, 2016 and 2015, respectively. The contributions made by the Company were US$27,520 and US$52,743 for the nine months ended September 30, 2016 and 2015, respectively.

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Distribution of Profit

9 Months Ended

Sep. 30, 2016

Distribution of Profit [Abstract]

DISTRIBUTION OF PROFIT

20. DISTRIBUTION OF PROFIT

The Company did not distribute any dividend to its shareholders for the three and nine months ended September 30, 2016 and 2015, respectively.

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Capital Transaction

9 Months Ended

Sep. 30, 2016

Capital Transaction [Abstract]

CAPITAL TRANSACTION

21. CAPITAL TRANSACTION

Initial Public Offering

On August 16, 2013, the Company closed an initial public offering (“IPO”) of 1,370,000 shares of Common Stock. On August 26, 2013, the Company sold additional 45,657 shares of Common Stock from the exercise of the overallotment option of shares granted to the underwriters. The public offering price of the shares sold in the IPO was $6.50 per share. The total gross proceeds from the offering were $9.2 million. After deducting underwriting discounts and commissions and offering expenses payable by the Company, the aggregate net proceeds received by the Company totaled approximately $7.6 million.

Upon the consummation of the Company’s IPO on August 16, 2013, the Series A Stock and the Series B Stock (defined below) were automatically converted into shares of Common Stock.

Secondary Public Offering

On May 13, 2014, the Company closed its second public offering (“Follow-on Offering”) of 1,750,000 shares of Common Stock and 1,750,000 warrants to purchase an additional 875,000 shares of Common Stock. The public offering price of the shares was $3.99 per share and the offering pricing for the warrants was $0.01 per warrant. 1,650,386 shares of Common Stock were newly issued by the Company and 99,614 shares of Common Stock were sold by certain selling stockholders. On June 12, 2014, the representative in the Follow-on Offering exercised its over-allotment option to purchase 252,000 warrants to purchase 126,250 shares of Common Stock. The total gross proceeds in the Follow-on Offering and the over-allotment were $6.6 million. After deducting underwriting discounts and commissions and offering expenses payable by the Company and the proceeds to the selling stockholders, the aggregate net proceeds received by the Company totaled approximately $5.7 million.

Common Stock

The Company is authorized to issue up to 100,000,000 shares of Common Stock.

As of December 31, 2015, there were 12,390,062 shares of Common Stock issued and outstanding.

On January 13, 2016, the Company issued 6,000 unregistered shares to John Levy, the Company’s Chairman of Audit Committee, at a market value of US$0.32 per share, in the total amount of US$1,920, for his services provided.

On April 15, 2016, the Company issued 637,592 unregistered shares to Pearlman Schenider LLP, the Company’s legal consultant, at a market value of US$0.58 per share, in the total amount of US$369,803, for the services provided.

On April 27, 2016, the Company issued 15,000, 195,000 and 155,000 unregistered shares to John Levy, the Company’s Chairman of Audit Committee, Jingeng Ling, the Company’s Former Chief Executive Officer, and Long Yi, the Company’s Chief Financial Officer, respectively. The shares were issued at a market value of US$0.58 per share, in the total amount of US$211,700, for the services provided.

On June 8, 2016, the Company closed a private placement to a third party individual investor to issue 2,439,025 common shares, at a per share price of US$0.41, in the total amount of US$1,000,000. This transaction was at arm’s length. The shares shall be authorized for listing on the NASDAQ capital market before closing, and the net proceeds of the sale of the shares shall be used by the Company for working capital and general corporate purpose.

On September 14, 2016, the Company issued 300,000 restricted shares to Shanchun Huang, the designee of Wealth Index Capital Limited, for the consulting services provided. The shares were issued at a market value of US$2.57, in the total amount of $771,000.

As of September 30, 2016, there were 16,137,679 shares of Common Stock issued and outstanding.

Warrants

The IPO underwriters’ and their affiliates’ received warrants to purchase an aggregate of 95,900 shares of Common Stock, which are exercisable at any time, and from time to time, in whole or in part, during the three-year period from February 10, 2014. The warrants are initially exercisable at a per share price of $6.50.

Warrants to purchase an aggregate of 875,000 shares of Common Stock were issued in the Follow-on Offering on May 13, 2014. The issuance price was $0.01 per warrant, and the warrants are exercisable at any time, and from time to time, in whole or in part, during the three-year period from May 13, 2014. The warrants are initially exercisable at a per share price of $5.60 and are recorded as additional paid-in capital.

Warrants to purchase 252,500 shares of Common Stock were issued to the underwriters in the Follow-on Offering. The warrants have a cashless exercise provision and are exercisable at any time, and from time to time, in whole or in part, during the three-year period from May 13, 2014. The warrants are initially exercisable at a per share price of $4.80 and are recorded as additional paid-in capital.

Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock, of which 1,000,000 shares are designated as Series A Convertible Preferred Stock (the “Series A Stock”) and 5,000,000 shares are designated as Series B Convertible Preferred Stock (the “Series B Stock”).

The Series A Stock ranked (i) prior to the Common Stock and to all other classes and series of equity securities of the Company which by their terms do not rank senior to the Series A Stock, and (ii) junior to any class or series of equity securities which by its terms ranked senior to the Series A Stock. The Series A Stocks was subordinate to and ranked junior to all indebtedness of the Company. Each share of the Series A Stock was on the day on which the Company consummated its IPO, automatically and without any action on the part of the holder thereof converted into issued and outstanding shares of Common Stock beneficially owned by a consultant who received the shares on December 19, 2011. The number of shares of Common Stock issued upon conversion of the Series A Stock was equal to the purchase price of the Series A Stock divided by a per share conversion price of 50% of the price of a share of Common Stock in the IPO. No new shares were issued by the Company at the conversion. In addition, the holders were not permitted to convert their preferred stock prior to consummation of the IPO.

The Series B Preferred Stock ranked (i) prior to the Common Stock and to all other classes and series of equity securities of the Company which by their terms do not rank senior to the Series B Preferred Stock and (ii) junior to any class or series of equity securities which by its terms ranked senior to the Series B Preferred Stock. The Series B Stock was subordinate to and ranked junior to all indebtedness of the Company. Each share of the Series B Stock was on the day on which the Company consummated its IPO, automatically and without any action on the part of the holder thereof converted into issued and outstanding shares of Common Stock beneficially owned by a consultant who received the shares on December 19, 2011. The number of shares of Common Stock issued upon conversion of the Series B Stock was equal to the purchase price of the Series B Stock divided by a per share conversion price of 25% of the price of a share of Common Stock in the IPO. No new shares were issued by the Company at the conversion. In addition, the holders were not permitted to convert their preferred stock prior to consummation of the IPO.

Between January 1, 2012 and April 1, 2013, the Company issued a total of 745 shares of Series A Stock to an aggregate of 11 investors pursuant to certain subscription agreements. We received gross proceeds of $372,500 and incurred costs associated with this private placement of $93,125.

Between October 12, 2012 and May 8, 2013, the Company issued a total of 760 shares of Series B Stock to an aggregate of 44 investors pursuant to certain subscription agreements. We received gross proceeds of $380,000 and incurred costs associated with this private placement of $95,000.

On August 16, 2013 when the Company closed its IPO, all outstanding shares of the Series A Stock and Series B Stock were converted into an aggregate of 348,462 shares of already issued and outstanding Common Stock beneficially owned by a consultant who received our shares on December 19, 2011, automatically and without any action on the part of the holder thereof. The per share conversion price of Series A Stock and Series B Stock was equal to $3.25 and $1.63, respectively.

The discount on the Series A and B Stock was accounted for as a beneficial conversion feature upon conversion. The total amount of discount was $752,500, which was accounted for as a reduction to retained earnings and an offsetting increase to additional paid in capital in the Company's financial statements.

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Statutory Reserve

9 Months Ended

Sep. 30, 2016

Statutory Reserve [Abstract]

STATUTORY RESERVE

22. STATUTORY RESERVE

In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide statutory reserve, which is appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. The Company allocates 15% of its annual after-tax profit to the statutory reserve. The statutory reserve can only be used for specific purposes and are not distributable as cash dividends. WFOE was established as a foreign-invested enterprise and, therefore, is subject to the above mandated restrictions on distributable profits. For the three and nine months ended September 30, 2016 and 2015, the Company did not accrue the statutory reserve due to net loss.

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Loss Per Common Share

9 Months Ended

Sep. 30, 2016

Loss Per Common Share [Abstract]

LOSS PER COMMON SHARE

23. LOSS PER COMMON SHARE

The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2016 and 2015, respectively:

	For The Three Months Ended						For The Nine Months Ended
	September 30,						September 30,
	2016 (Unaudited)			2015 (Unaudited)			2016 (Unaudited)			2015 (Unaudited)
Net loss attributable to the common shareholders	$	624,445		$	37,101,946		$	1,206,116		$	40,629,513
Basic weighted-average common shares outstanding		15,889,853			12,390,062			14,026,815			12,330,721
Effect of dilutive securities		-			-			-			-
Diluted weighted-average common shares outstanding		15,889,853			12,390,062			14,026,815			12,330,721
Loss  per share:
Basic	$	(0.039	)	$	(2.994	)	$	(0.086	)	$	(3.295	)
Diluted	$	(0.039	)	$	(2.994	)	$	(0.086	)	$	(3.295	)

Basic loss per share are computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share were the same as basic loss per share due to the lack of dilutive items in the Company for the three and nine months ended September 30, 2016 and 2015. The number of warrants is omitted from the computation as the anti-dilutive effect.

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Income Taxes and Tax Payable

9 Months Ended

Sep. 30, 2016

Income Taxes and Tax Payable [Abstract]

INCOME TAXES AND TAX PAYABLE

24. INCOME TAXES AND TAX PAYABLE

Effective January 1, 2008, the New Taxation Law of PRC stipulates that domestically owned enterprises and foreign invested enterprises (the “FIEs”) are subject to a uniform tax rate of 25%. While the New Tax Law equalizes the tax rates for FIEs and domestically owned enterprises, preferential tax treatment may continue to be given to companies in certain encouraged sectors and to entities classified as high-technology companies, regardless of whether these are domestically-owned enterprises or FIEs. In November 2009, the Jiangsu Province Government issued Su Zheng Ban Fa [2009] No. 132 which stipulates that micro-credit companies in Jiangsu Province is subject to preferential tax rate of 12.5%. As a result, the Company is subject to the preferential tax rate of 12.5% for its loan business for the periods presented. The taxation practice implemented by the tax authority governing the Company is that the Company pays enterprise income taxes at rate of 25% on a quarterly basis, and upon annual tax settlement done by the Company and the tax authority in five (5) months after December 31 the tax authority will refund the Company the excess enterprise income taxes it paid beyond the rate of 12.5%. However since 2015, the excess enterprise income taxes paid will not be refunded but can be used to offset the future income tax payable arising from taxable income.

The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the three and nine months ended September 30, 2016 and 2015, the Company had no unrecognized tax benefits. For the nine months ended September 30, 2016, the Company made net tax operating profit from its PRC subsidiaries and its consolidated VIE of US$422,684. As of September 30, 2016, the Company has carry-forward tax operating losses from its PRC subsidiaries and its consolidated VIE of US$61,463,690, which will expire from the year ending December 31, 2019 to 2021. The Company recognized deferred income tax assets of US$11,739,850 as of September 30, 2016. However, the Company estimates there will be no sufficient net income before income tax from years ending December 31, 2016 to 2021 to realize the deferred income tax assets. The Company provided valuation allowance for deferred income tax assets of US$11,739,850 as of September 30, 2016.

The Company does not anticipate any significant increase to its liability for unrecognized tax benefit within the next 12 months. The Company will classify interest and penalties related to income tax matters, if any, in income tax expense.

Income tax payable is comprised of:

	September 30, 2016  (Unaudited)		December 31, 2015
Income tax payable	$	162,206	$	126,485

Income tax expense for the nine months ended September 30, 2016 and 2015 is comprised of:

	For the three months ended					For the nine months ended
	September 30,					September 30,
		2016 (Unaudited)		2015 (Unaudited)			2016 (Unaudited)		2015 (Unaudited)
Current income tax (credit)/expense	$	-	$	(53,999	)	$	-	$	7,508
Deferred income tax (credit)/expense		-		(4,610	)		-		587,142
Total provision for income taxes	$	-	$	(58,609	)	$	-	$	594,650

The effective tax rates for the nine months ended September 30, 2016 and 2015 are 0% and 1.49%, respectively.

Deferred tax liability arises from government incentive for the purpose of covering the Company’s actual loan losses and ruled that the income tax will be imposed on the subsidy if the purpose is not fulfilled within 5 years after the Company receives the subsidy. As of September 30, 2016 and December 31, 2015, subsidy of US$1,010,391 and US$1,011,877 did not fulfill the purpose within due date and the related deferred tax liability was transferred to income tax payable. As of September 30, 2016 and December 31, 2015, the deferred tax liability amounted to US$158,980 and US$204,266, respectively.

As of September 30, 2016 and December 31, 2015, the Company intends to permanently reinvest the undistributed earnings from its foreign subsidiaries to fund future operations. The amount of unrecognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries is not determined because such a determination is not practicable.

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Related Party Transactions and Balances

9 Months Ended

Sep. 30, 2016

Related Party Transactions and Balances [Abstract]

RELATED PARTY TRANSACTIONS AND BALANCES

25. RELATED PARTY TRANSACTIONS AND BALANCES

1) Nature of relationships with related parties

Name	Relationship with the Company
Wujiang Chunjia Textile Trading Co., Ltd (“Chunjia Textile”)	Controlled by Huichun Qin
Suzhou Rongshengda Investment Holding Co., Ltd.	Controlled by shareholders of Wujiang Luxiang
Suzhou Dingli Real Estate Co., Ltd.	Controlled by Former Chief Executive Officer
Huichun Qin	Non-controlling shareholder and former CEO and chairman of board of directors

2) Related party transactions

During the nine months ended September 30, 2016, Suzhou Dingli Real Estate Co., Ltd., a company controlled by Mr. Jingen Ling, the Former Chief Executive Officer was involved to provide guarantee services for the bank borrowings. No commissions or fees are required from the Company. Before September 30, 2016, all outstanding bank borrowings have been repaid.

During the nine months ended September 30, 2016, the Company made a loan of US$1,945,224  to Suzhou Rongshengda Investment Holding Co., Ltd., a company controlled by shareholders of Wujiang Luxiang. The loan was agreed to return by November 30, 2016. Due to the short-term borrowing, the Company did not charge any interest or fees. As of September 30, the balance is still outstanding.

3) Related party balances

Amount due from related parties were as follows:

	September 30, 2016 (Unaudited)		December 31, 2015
Suzhou Rongshengda Investment Holding Co., Ltd.	$	1,918,977	$	-
Chunjia Textile		324,005		622,807
Huichun Qin	$	1,049,441	$	1,078,300

As of September 30, 2016, the Company provided financial guarantee service for Chunjia Textile to guarantee loans of US$324,005. The Company accrued provision of US$162,002 on the outstanding balance as of September 30, 2016.

Huichun Qin transferred $1,098,197(equivalent of RMB 7 million) to his personal account without proper authorization on July 2, 2014. As of September 30, 2016, Huichun Qin has not repaid the balance. The amount was recorded as a deduction of the Company’s equity as of September 30, 2016 and December 31, 2015, respectively.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

26. COMMITMENTS AND CONTINGENCIES

1) Lease Commitments

During the year ended December 31, 2015, the Company leased its new office under a lease agreement from June 1, 2015 to May 31, 2021. As a result, in October 2015, the Company terminated the lease agreement for its former principal office which agreement was to expire on September 30, 2018. No default penalty was paid for the earlier termination. The following table sets forth the Company’s contractual obligations as of September 30, 2016 in future periods:

	Rental payments (Unaudited)
Year ending September 30, 2017		59,968
Year ending September 30, 2018		71,962
Year ending September 30, 2019		71,962
Year ending September 30, 2020		71,962
Year ending September 30, 2021		47,975
Total	$	323,829

2) Guarantee Commitments

The guarantees will terminate upon payment and/or cancellation of the obligation; however, payments by the Company would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee. Generally, the average guarantee expiration terms ranged within 12 to 24 months and the average percentage of the guarantee amount as security deposit is 10% ~ 20% . As of September 30, 2016 and December 31, 2015, the loan amount guaranteed by the Company was US$11,341,455 and US$11,653,342, respectively, for its financial guarantee service customers

3) Contingencies

The Company is involved in various legal actions arising in the ordinary course of its business. During nine months ended September 30, 2016, the Company was involved in 123 lawsuits, among which 85 were related to its loan business and 38 were related to guarantee business. The Company initiated legal proceedings to collect delinquent balances from borrowers and guarantees. 88 of these cases with an aggregated claim of USD 42.14 million have been adjudicated by the Court in favor of the Company and these cases are settled or in the process of enforcement. The remaining 35 cases with an aggregated claim of USD 29 million have not been adjudicated by the Court as of September 30, 2016.

On August 6, 2014, a purported shareholder Andrew Dennison filed a putative class action complaint in the United States District Court District of New Jersey (the “N.J. district court”) relating to a July 25, 2014 press release about the Company’s progress in recovering a significant portion of the $5.4 million the Company paid in the first quarter of 2014 on behalf of loan guarantee customers. The action, Andrew Dennison v. China Commercial Credit, Inc., et al., Case No. 2:2014-cv-04956, alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Xiangdong Xiao, and John F. Levy violated the federal securities laws by misrepresenting in prior public filings certain material facts about the risks associated with its loan guarantee business. On October 2, 2014, purported shareholders Zhang Yun and Sanjiv Mehrotra (the “Yun Group”) asserted substantially similar claims against the same defendants in a putative class action captioned Zhang Yun v. China Commercial Credit, Inc., et al., Case No. 2:14-cv-06136 (D. N.J.). Neither complaint states the amount of damages sought.

On or about October 6, 2014, Dennison, the Yun Group and another purported shareholder, Jason Stark, filed motions to consolidate the cases, be appointed as lead plaintiff and to have their respective counsel appointed as lead counsel. On October 31, 2014, the N.J. district court entered an order consolidating the cases under the caption “In re China Commercial Credit Inc. Securities Litigation” and appointing the Yun Group as lead plaintiff (“Class Plaintiff”) and the Yun Group’s counsel as lead counsel.

On November 18, 2014, the Yun Group and the Company, which at that point was the only defendant served, entered into a stipulation to transfer of the case to the Southern District of New York. On December 18, 2014, Mr. Levy, who had by then been served, joined in the stipulation. On December 29, 2014, the N.J. district court entered an order transferring the action. The transfer was effected on January 22, 2015, and assigned docket number 1:15-cv-00557-ALC (S.D.N.Y.).

Under the schedule stipulated by the parties, the Yun Group was to file an amended complaint within 60 days of the date that the transfer was effected, and the defendants’ date to answer or move was within 60 days of that filing. On April 7, 2015, the Class Plaintiff filed a Second Amended Class Action Complaint (the “CAC”). The CAC also asserts securities law claims against defendants Axiom Capital Management, Inc., Burnham Securities Inc. and ViewTrade Securities, Inc. (collectively, the “Underwriter Defendants”). The CAC alleges that the Company engaged in a fraudulent scheme by engaging in undisclosed and improper lending practices and made misleading representations regarding its underwriting policies, the loan portfolio quality, the loan loss allowance, compliance with U.S. GAAP and its internal control systems.

In accordance with the Court’s procedures, the Company and Mr. Levy and the Underwriter Defendants requested a Pre-Motion Conference in anticipation of filing a motion to dismiss the CAC, which was held on June 25, 2015. At the conference, the Court adjourned the date to answer or move in order to provide the Class Plaintiff with time to serve certain overseas defendants. After the conference, the Class Plaintiff voluntarily dismissed Jianming Yin, Jinggen Ling and Xiangdong Xiao from the action, and Long Yi agreed to waive service, which left Huichun Qin as the sole remaining defendant to serve. The case remains stayed pending service of Huichun Qin.

Two of the Underwriter Defendants, Axiom Capital Management, Inc., and ViewTrade Securities, Inc., have asserted their respective rights to indemnification under the Underwriting Agreements entered into in connection with the Company’s initial public offering and secondary offering. On or about March 16, 2016, CCCR entered into an Advance Funding and Escrow Agreement, under which the CCCR agreed to deposit shares into escrow to fund the advancement obligation, with the initial deposit to be shares valued at Two Hundred Thousand Dollars ($200,000), based upon 80% of the 30 day volume weighted average Trading Price ("VWAP") for each of the 30 consecutive trading days prior to the date of the Agreement.

On February 3, 2015, a purported shareholder Kiram Kodali filed a putative shareholder derivative complaint in the United States District Court for the Southern District of New York, captioned Kiran Kodali v. Huichun Qin, et al., Case No. 15-cv-806. The action alleges that the Company and its current and former officers and directors Huichun Qin, Long Yi, Jianming Yin, Jinggen Ling, Chunfang Shen, John F. Levy, Xiaofang Shen and Chunjiang Yu violated their fiduciary duties, grossly mismanaged the Company and were unjustly enriched based upon the transfer that was the subject of the Internal Review and other grounds substantially similar to those asserted in the class action complaints. Kodali did not serve a demand upon the Company and alleges that demand is excused. The Company and Mr. Levy have been served. An amended derivative complaint was filed on April 20, 2015. On May 29, 2015, the Court “so ordered” a stipulation among Kodali, the Company and Mr. Levy staying all proceedings in the derivative case except for service of process on individual defendants until the earlier of thirty days of termination of the stipulation, dismissal of the class action with prejudice or the date any of the defendants in the class action file an answer to the CAC. The Company believes that this lawsuit is without merit and intends to vigorously defend against it. At this stage of the proceedings, the Company is not able to estimate the probability of success or loss.

On May 18, 2015, WFOE filed a civil complaint against Huichun Qin with the Wujiang Region Suzhou City People’s Court claiming Mr. Qin’s misappropriation of RMB 7 million in July 2014. The complaint was rejected due to a procedural issue. The Company has since learned that Mr. Qin has been convicted and sentenced to a term of incarceration of approximately five years. In view of this information, the Company is evaluating its strategic options.

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Subsequent Event

9 Months Ended

Sep. 30, 2016

Subsequent Event [Abstract]

SUBSEQUENT EVENT

27. SUBSEQUENT EVENT

1) Receipt of NASDAQ Deficiency Notice

On November 4, 2016, the Company received a written notice from The Nasdaq Stock Market (“Nasdaq”) stating that the Company is no longer in compliance with the minimum Market Value of Listed Securities requirement for continued listing on the Nasdaq Capital Market. Nasdaq 5550(b)(2) requires listed companies to maintain a minimum Market Value of Listed Securities of at least $35 million. Further, as of November 4, 2016, the Company did not meet the alternative compliance standards under Nasdaq Listing Rule 5550(b) of (i) net income from continuing operations of $500,000 in its last completed fiscal year or in two of the last three fiscal years, or (ii) stockholders' equity of at least $2.5 million.

The notification letter has no immediate effect on the Company’s listing on the Nasdaq Capital Market. Nasdaq provided the Company a compliance period of 180 calendar days, or until May 3, 2017, to regain compliance. The Company intends to promptly evaluate options available to regain compliance and to timely submit a plan to regain compliance with Nasdaq’s minimum stockholders’ equity standard. There can be no assurance that the Company’s plan will be accepted or that, if it is, the Company will be able to regain compliance with the applicable Nasdaq listing requirements.

2) Charged-off loans

During the period from October 1, 2016 to the date of this report, the Company assessed the charged-off loan and guarantee balances recorded as of September 30, 2016 and was of the opinion that these balances were uncollectible. In addition, the Company assessed the remaining balances of loan receivable and financial guarantee and was of the opinion that it was not necessary to charge-off these balances.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Summary of Significant Accounting Policies [Abstract]

Basis of presentation and principle of consolidation

(a) Basis of presentation and principle of consolidation

The interim financial information as of September 30, 2016 and for the three and nine months ended September 30, 2016 and 2015 have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended December 31, 2015 filed with the SEC on April 14, 2016.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s financial position as of September 30, 2016, its results of operations for the three and nine months ended September 30, 2016 and 2015, and its cash flows for the nine months ended September 30, 2016 and 2015, as applicable, have been made. The unaudited interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

The unaudited interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

The Company has suffered an accumulated deficit of US$69,460,635 as of September 30, 2016. In addition, the Company had working capital (total consolidated current assets exceeding total consolidated current liabilities) of US$2,745,893, as of September 30, 2016. As of September1 30, 2016, the Company had cash and cash equivalents of US$1,167,361, and total short-term borrowings of US$ nil.

These and other factors disclosed in this quarterly report raise substantial doubt as to the Company’s ability to continue as a going concern. Management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, will provide sufficient liquidity to meet the Company obligations for a reasonable period of time.

● Financial Support

The Company is actively seeking other strategic investors with experience in lending business. If necessary, the shareholders of Wujiang Luxiang will contribute more capital into Wujiang Luxiang. On June 8, 2016, the Company closed a private placement with a third-party individual investor to issue 2,439,025 common shares, at a per share price of US$0.41, and raised US$1,000,000 from therefrom. This transaction was at arm’s length. The shares shall be authorized for listing on the NASDAQ capital market, and the net proceeds of the sale of the shares shall be used by the Company for working capital and general corporate purpose. These issued and outstanding shares are deemed a permanent equity of the Company.

● Improvement in Working Capital Management

In order to meet the capital needs for our continued operations, we continue to use our best effort to improve our collection of loan receivable and interest receivable. We engaged four law firms, Jiangsu Zhenyuzhen Law Firm, Jiangsu Tianbian Law Firm, Jiangsu Mingren Law Firm and He-Partners Law Firm to represent us in the legal proceedings against the borrowers and their counter guarantors. Among them, He-Partners Law Firm, is one of the largest law firms in Suzhou City.

While management believes that the measures in the liquidity plan will be adequate to satisfy its liquidity and cash flow requirements for the twelve months ending September 30, 2017, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan will have a material adverse effect on the Company’s business, results of operations and financial position, and may materially adversely affect its ability to continue as a going concern.

All significant inter-company accounts and transactions have been eliminated in consolidation.

Operating segments

(b) Operating segments

ASC 280, Segment Reporting requires companies to report financial and descriptive information about their reportable operating segments, including segment profit or loss, certain specific revenue and expense items, and segment assets. The Company has no reportable segments. All of the Company's activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with registered capital and other borrowings and manage interest rate and credit risk.

The Company has only one reportable segment, which is to provide financial services in the PRC domestic market, primarily in Wujiang City, Jiangsu Province. The Company’s chief operating decision-maker (“CODM”) has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for both the direct lending and guarantee business and the anticipated financial leasing business. The Company’s net revenues are all generated from customers in the PRC. Hence, the Company operates and manages its business without segments. For the three and nine months ended September 30, 2016 and 2015, there was no one customer that accounted for more than 10% of the Company's revenue.

Cash

(c) Cash

Cash consists of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains accounts at banks and has not experienced any losses from such concentrations.

Restricted cash

(d) Restricted cash

Restricted cash represents cash pledged with banks as guarantor deposit for the guarantee business customers. The banks providing loans to the Company’s guarantee service customers generally require the Company, as the guarantor of the loans, to pledge a cash deposit of 10% to 20% of the guaranteed amount to an escrow account and is restricted from use. The deposits are released after the guaranteed bank loans are paid off and the Company’s guarantee obligation expires which is usually within 12 months.

Loans receivable, net

(e) Loans receivable, net

Loans receivable primarily represent loan amount due from customers. The management has the intent and ability to hold such receivable for the foreseeable future or until maturity or payoff. Loans receivable are recorded at unpaid principal balances, net of allowance for loan losses that reflects the Company’s best estimate of the amounts that will not be collected. Loan origination and commitment fees and certain direct loan origination costs collected from customers are directly recorded in current year interests and fees on loans. The loans receivable portfolio consists of corporate loans and personal loans (Note 6). The Company does not charge loan origination and commitment fees.

Allowance for loan losses

(f) Allowance for loan losses

The allowance for loan losses is increased by charges to income and decreased by charge offs (net of recoveries). Recoveries represent subsequent collection of amounts previously charged-off. The increase in allowance for loan losses is the netting effect of “reversal” and “provision” for both business and personal loans. If the ending balance of the allowance for loan losses after any charge offs (net of recoveries) is less than the beginning balance, it will be recorded as a “reversal”; if it is larger, it will be recorded as a “provision” in the allowance for loan loss. The netting amount of the “reversal” and the “provision” is presented in the consolidated statements of operations and comprehensive income (loss).

The Company recognizes a charge-off when management determines that full repayment of a loan is not probable. The primary factor in making that determination is the potential outcome of a lawsuit against the delinquent debtor. The Company will recognize a charge-off when the Company loses contact with the delinquent borrower for more than six months or when the court rules against the Company to seize the collateral asset of the delinquent debt from either the guarantor or borrower.

The allowance for loan losses is maintained at a level believed to be reasonable by management to absorb probable losses inherent in the portfolio as of each balance sheet date. The allowance is based on factors such as the size and current risk characteristics of the portfolio, an assessment of individual loan and actual loss, delinquency, and/or risk rating record within the portfolio (Note 7). The Company evaluates its allowance for loan losses on a quarterly basis or more often as necessary.

Interest receivable

(g) Interest receivable

Interest on loans receivable is accrued and credited to income as earned. The Company determines a loan past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days. Additionally, any previously accrued but uncollected interest is reversed. Subsequent recognition of income occurs only to the extent payment is received, subject to management’s assessment of the collectability of the remaining interest and principal. Loans are generally restored to an accrual status when it is no longer delinquent and collectability of interest and principal is no longer in doubt and past due interest is recognized at that time.

The interest reversed due to the above reason was US$3,955,890 and US$2,593,611 as of September 30, 2016 and December 31, 2015, respectively.

Property and equipment

(h) Property and equipment

The property and equipment are stated at cost less accumulated depreciation. The depreciation is computed on a straight-line method over the estimated useful lives of the assets with 5% salvage value. Estimated useful lives of property and equipment are stated in Note 12.

The Company eliminates the cost and related accumulated depreciation of assets sold or otherwise retired from the accounts and includes any gain or loss in the statement of income. The Company charges maintenance, repairs and minor renewals directly to expenses as incurred; major additions and betterment to equipment are capitalized.

Impairment of long-lived assets

(i) Impairment of long-lived assets

The Company applies the provisions of ASC No. 360 Sub topic 10, "Impairment or Disposal of Long-Lived Assets"(ASC 360- 10) issued by the Financial Accounting Standards Board ("FASB"). ASC 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

The Company tests long-lived assets, including property and equipment and finite lived intangible assets, for impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the net carrying amount is greater than its fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows as the rate the Company utilizes to evaluate potential investments. The Company estimates fair value based on the information available in making whatever estimates, judgments and projections are considered necessary. There were no impairment losses in the three and nine months ended September 30, 2016 and 2015.

Fair values of financial instruments

(j) Fair values of financial instruments

ASC Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information of financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Topic 825 excludes certain financial instruments and all nonfinancial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company.

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

As of September 30, 2016 and December 31, 2015, financial instruments of the Company primarily comprise of cash, restricted cash, notes receivable, loan receivables, other receivable, short-term bank loans, deposits payable and accrued expenses, which were carried at cost on the consolidated balance sheets, and carrying amounts approximated their fair values because of their generally short maturities.

Foreign currency translation and transaction

(k) Foreign currency translation and transaction

The reporting currency of the Company is United States Dollars (“US$”), which is also the Company’s functional currency. The PRC subsidiaries and VIEs maintain their books and records in its local currency, the Renminbi Yuan (“RMB”), which is their functional currencies as being the primary currency of the economic environment in which these entities operate.

For financial reporting purposes, the financial statements of the Company prepared using RMB, are translated into the Company’s reporting currency, United States Dollars, at the exchange rates quoted by www.oanda.com. Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and shareholders’ equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in shareholders’ equity.

	September 30,  2016		December 31,  2015
Balance sheet items, except for equity accounts		6.6702		6.4917

	For the nine months ended  September 30,
	2016		2015
Items in the statements of income and comprehensive income, and statements of cash flows		6.5802		6.1735

Transactions denominated in currencies other than the functional currency are translated into prevailing functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the consolidated statements of comprehensive loss.

Use of estimates

(l) Use of estimates

The preparation of consolidated financial statements in conformity with 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 period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the financial statements include: (i) the allowance for doubtful debts; (ii) estimates of losses on unexpired loan contracts and guarantee service contracts; (iii) accrual of estimated liabilities; (iv) useful lives of long-lived assets; (v) the impairment of long-lived assets; (vi) the valuation allowance of deferred tax assets; and (vii) contingencies and litigation.

Revenue recognition

(m) Revenue recognition

Revenue is recognized when there are probable economic benefits to the Company and when the revenue can be measured reliably, on the following:

● Interest income on loans. Interest on loan receivables is accrued monthly in accordance with their contractual terms and recorded in accrued interest receivable. The Company does not charge prepayment penalty from customers. Additionally, any previously accrued but uncollected interest is discontinued of accrual and reversed, when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days.

● Commission on guarantee service. The Company receives the commissions from guarantee services in full at inception and records as unearned income before amortizing it throughout the period of guarantee.

● Income on direct financing lease. The financing agreements are classified as direct financing lease as prescribed by the Financial Accounting Standards Board ("FASB Codification"). Revenues representing the capitalized costs of the investment are recognized as income upon inception of the leases. The portion of revenues representing the difference between the gross investment in the lease (the sum of the minimum lease payments and the guaranteed residual value, if any) and the sum of the present value of the two components is recorded as unearned income and amortized over the lease term

Taxes assessed by governmental authorities that are directly imposed on revenue-producing transactions between the Company and its customers (which may include, but are not limited to, sales, use, value added and some excise taxes) are excluded from revenues.

Lessees are responsible for all taxes, insurance and maintenance costs.

● Non-interest income. Non-interest income mainly includes rental income from the sub-leasing of certain of the Company’s leased office space to third parties and income from disposal of property and equipment

Financial guarantee service contract

(n) Financial guarantee service contract

Financial guarantee service contracts provides guarantee which protects the holder of a debt obligation against default. Pursuant to such guarantee, the Company makes payments if the obligor responsible for making payments fails to do so as scheduled.

The contract amounts reflect the extent of involvement the Company has in the guarantee transaction and also represent the Company’s maximum exposure to credit loss in its guarantee business.

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. Financial instruments representing credit risk are as follows:

	September 30, 2016  (Unaudited)		December 31,  2015
Guarantee	$	11,341,455	$	11,653,342

A provision for possible loss to be absorbed by the Company for the financial guarantee it provides is recorded as an accrued liability when the guarantees are made and recorded as “Accrual for financial guarantee services” on the consolidated balance sheets. This liability represents probable losses and is increased or decreased by accruing a “(Provision of)/Reversal of provision for financial guarantee services” against the income of commissions and fees on guarantee services reserve.

This is done throughout the life of the guarantee, as necessary when additional relevant information becomes available. The methodology used to estimate the liability for possible guarantee loss considers the guarantee contract amount and a variety of factors, which include, depending on the counterparty, latest financial position and performance of the borrowers, actual defaults, estimated future defaults, historical loss experience, estimated value of collaterals or guarantees the customers or third parties offered, and other economic conditions such as the economy trend of the area and the country. The estimates are based upon currently available information.

Based on the past experience and expected customer default status of financial guarantee services, the Company estimates the probable loss for immature financial guarantee services to be approximately 50% or 100% of contract amount as of September 30, 2016 and December 31, 2015, and made a provision of US$6,015,092 and US$5,691,253 as of these two reporting dates, respectively, for possible credit risk of its guarantees. In addition, the Company accrued specific provisions for repayment on behalf of guarantee customers who defaulted on their loans, in the amount of US$12,294,889 and US$13,631,304 as of September 30, 2016 and December 31, 2015, respectively. The total accrual for financial guarantee services amounted to US$18,309,981 and US$19,322,557 as of September 30, 2016 and December 31, 2015, respectively. The Company reviews the provision on a quarterly basis.

The Company provided provision of US$385,352 and reversed provision of US$9,035,700 for the nine months ended September, 2016 and 2015, respectively. The provision for the financial guarantee services was US$599,808 and US$7,322,936 for the three months ended September 30, 2016 and 2015, respectively.

During nine months ended September 30, 2016 and December 31, 2015, the management charged off specific provision for one and one customer in the amount of US$116,856 and US$262,422, considering remote collectability from the customers. The Company charged off US $Nil and US$262,422 for the three months ended September 30, 2016 and 2015, respectively.

Non-interest expenses

(o) Non-interest expenses

Non-interest expenses primarily consist of salary and benefits for employees, traveling cost, entertainment expenses, depreciation of equipment, office rental expenses, professional service fee, office supplies, etc.

Income tax

(p) Income tax

Current income tax expenses are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company accounts for income taxes using the liability approach. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income.

Comprehensive income

(q) Comprehensive income

Comprehensive income includes net income and foreign currency adjustments. Comprehensive income is reported in the statements of operations and comprehensive income.

Accumulated other comprehensive income, as presented on the balance sheets are the cumulative foreign currency translation adjustments.

Share-based awards

(r) Share-based awards

Share-based awards granted to the Company's employees are measured at fair value on grant date and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares.

At each date of measurement, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including but not limited to the fair value of the underlying shares, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the share-based awards changes significantly, share-based compensation expense may differ materially in the future from that recorded in the current reporting period.

Operating leases

(s) Operating leases

The Company leases its principal office under a lease agreement that qualifies as an operating lease. The Company records the rental under the lease agreement in the operating expense when incurred.

Commitments and contingencies

(t) Commitments and contingencies

In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450 Sub topic 20, “Loss Contingencies”, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

Recently issued accounting standards

(u) Recently issued accounting standards

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company is evaluating this ASU and has not determined the effect of this standard on its ongoing financial reporting.

In June 2016, the FASB issued new accounting guidance for recognition of credit losses on financial instruments, which is effective January 1, 2020, with early adoption permitted on January 1, 2019. The guidance introduces a new credit reserving model known as the Current Expected Credit Loss (CECL) model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information and will likely result in earlier recognition of credit reserves. Credco does not intend to adopt the new standard early and is currently evaluating the impact the new guidance will have on its financial position, results of operations and cash flows; however, it is expected that the new CECL model will alter the assumptions used in calculating credit losses on Card Member receivables and loans, among other financial instruments, and may result in material changes to Credco’s credit reserves.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2016

Summary of Significant Accounting Policies [Abstract]

Schedule of adjustments from translations recorded as a separate component of AOCI in shareholders equity - balance sheet components

	September 30,  2016		December 31,  2015
Balance sheet items, except for equity accounts		6.6702		6.4917

Adjustments from translations recorded as a separate component of AOCI in shareholders equity - statements of income and comprehensive income components

	For the nine months ended  September 30,
	2016		2015
Items in the statements of income and comprehensive income, and statements of cash flows		6.5802		6.1735

Schedule of financial guarantee service contract

	September 30, 2016  (Unaudited)		December 31,  2015
Guarantee	$	11,341,455	$	11,653,342

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Variable Interest Entities and Other Consolidation Matters (Tables)

9 Months Ended

Sep. 30, 2016

Variable Interest Entities and Other Consolidation Matters [Abstract]

Schedule of variable interest entities

	September 30, 2016  (Unaudited)		December 31, 2015
Total assets	$	20,216,911	$	22,920,730
Total liabilities	$	20,267,692	$	23,932,841

	For the three months ended September 30,					For the nine months ended September 30,
	2016  (Unaudited)		2015  (Unaudited)			2016  (Unaudited)		2015  (Unaudited)
Revenue	$	672,646	$	120,929		$	1,151,308	$	2,272,057
Net income/(loss)	$	2,807	$	(36,925,013	)	$	910,203	$	(40,083,818	)

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Loans Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2016

Loans Receivable, Net [Abstract]

Schedule of loans receivable

	September 30, 2016  (Unaudited)			December 31, 2015
Business loans	$	37,913,015		$	40,498,813
Personal loans		21,627,323			22,577,907
Total Loans receivable		59,540,338			63,076,720
Allowance for loan losses
Collectively assessed		(54,104,303	)		(55,595,653	)
Individually assessed		-			-
Allowance for loan losses		(54,104,303	)		(55,595,653	)
Loans receivable, net	$	5,436,035		$	7,481,067

Schedule of nonaccrual loans by classes of loan

	September 30, 2016  (Unaudited)		December 31, 2015
Business loans	$	28,914,735	$	21,907,409
Personal loans		11,867,525		10,211,501
	$	40,782,260	$	32,118,910

Schedule of the aging of past due loans

	1-89 Days Past Due  (Unaudited)		90 - 179 Days Past Due  (Unaudited)		180 - 365 Days Past Due  (Unaudited)		Over 1 year Past Due  (Unaudited)		Total Past Due  (Unaudited)		Current  (Unaudited)		Total Loans  (Unaudited)
Business loans	$	8,998,280	$	4,950,601	$	7,080,726		16,883,408	$	37,913,015	$	-	$	37,913,015
Personal loans		9,714,822		-		4,627,883		7,239,642		21,582,347		44,976		21,627,323
	$	18,713,102	$	4,950,601	$	11,708,609		24,123,050	$	59,495,362	$	44,976	$	59,540,338

	1-89 Days Past Due		90 - 179 Days Past Due		180 - 365 Days Past Due		Over 1 year Past Due		Total Past Due		Current		Total Loans
Business loans	$	77,021	$	4,313,200	$	7,555,846		10,038,363	$	21,984,430	$	18,514,383	$	40,498,813
Personal loans		924,257		1,848,514		3,749,403		4,613,584		11,135,758		11,442,149		22,577,907
	$	1,001,278	$	6,161,714	$	11,305,249		14,651,947	$	33,120,188	$	29,956,532	$	63,076,720

Schedule of loans portfolio by credit quality indicator

Five Categories	September 30, 2016  (Unaudited)		%			December 31, 2015		%
Pass	$	-		-		$	-		-
Special mention		-		-			-		-
Substandard		-		-			2,695,750		4.3	%
Doubtful		10,872,069		18.3	%		9,841,658		15.6	%
Loss		48,668,269		81.7	%		50,539,312		80.1	%
Total	$	59,540,338		100	%	$	63,076,720		100	%

Schedule of loans portfolio by collateral

	September 30, 2016  (Unaudited)
	Business Loans		Personal Loans		Total
Guarantee backed loans	$	35,592,373	$	20,760,785	$	56,353,158
Pledged assets backed  loans		2,320,642		866,538		3,187,180
Collateral backed loans		-		-		-
	$	37,913,015	$	21,627,323	$	59,540,338

	December 31, 2015
	Business Loans		Personal Loans		Total
Guarantee backed loans	$	37,498,183	$	21,510,390	$	59,008,573
Pledged assets backed  loans		3,000,630		1,067,517		4,068,147
Collateral backed loans		-		--		-
	$	40,498,813	$	22,577,907	$	63,076,720

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Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2016

Allowance for Loan Losses [Abstract]

Schedule of allowance for loan losses and related investment

	Business Loans  (Unaudited)			Personal Loans  (Unaudited)			Total  (Unaudited)
For the three months ended September 30, 2016
Beginning balance	$	34,326,727		$	20,161,476		$	54,488,203
Charge-offs		-			-			-
Recoveries		(50,612	)		(121,435	)		(172,047	)
Provisions		(360	)		-			(360	)
Foreign exchange impact		(133,237	)		(78,256	)		(211,493	)
Ending balance		34,142,518			19,961,785			54,104,303
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	34,142,518		$	19,961,785		$	54,104,303

	Business Loans  (Unaudited)			Personal Loans  (Unaudited)			Total  (Unaudited)
For the three months ended September 30, 2015
Beginning balance	$	16,598,522		$	9,597,444		$	26,195,966
Charge-offs		(26,341,752	)		(14,792,268	)		(41,134,020	)
Recoveries		-			-			-
Provisions		18,839,288			10,275,122			29,114,410
Ending balance		9,096,058			5,080,298			14,176,356
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	9,096,058		$	5,080,298		$	14,176,356

	Business Loans  (Unaudited)			Personal Loans  (Unaudited)			Total  (Unaudited)
For the nine months ended September 30, 2016
Beginning balance	$	35,083,738		$	20,511,915		$	55,595,653
Charge-offs					-			-
Recoveries		(127,977	)		(1,155	)		(129,132	)
Provisions		125,729			-			125,729
Foreign exchange impact		(938,972	)		(548,975	)		(1,487,947	)
Ending balance		34,142,518			19,961,785			54,104,303
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	34,142,518		$	19,961,785		$	54,104,303

	Business Loans  (Unaudited)			Personal Loans  (Unaudited)			Total  (Unaudited)
For the nine months ended September 30, 2015
Beginning balance	$	14,836,650		$	9,654,071		$	24,490,721
Charge-offs		(26,341,752	)		(14,792,268	)		(41,134,020	)
Recoveries		-			(56,627	)		(56,627	)
Provisions		20,601,160			10,275,122			30,876,282
Ending balance		9,096,058			5,080,298			14,176,356
Ending balance: individually evaluated for impairment		-			-			-
Ending balance: collectively evaluated for impairment	$	9,096,058		$	5,080,298		$	14,176,356

Schedule of loan portfolio by the aggregate pass rating and the classified ratings

	Pass  (Unaudited)		Special Mention  (Unaudited)		Substandard  (Unaudited)		Doubtful  (Unaudited)		Loss  (Unaudited)		Total  (Unaudited)
Business loans	$	-	$	-	$	-	$	7,540,994	$	30,372,021	$	37,913,015
Personal loans		-		-		-		3,331,075		18,296,248		21,627,323
	$	-	$	-	$	-	$	10,872,069	$	48,668,269	$	59,540,338

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Business loans	$	-	$	-	$	2,618,729	$	6,103,192	$	31,776,892	$	40,498,813
Personal loans		-		-		77,021		3,738,466		18,762,420		22,577,907
	$	-	$	-	$	2,695,750	$	9,841,658	$	50,539,312	$	63,076,720

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Guarantee Paid on Behalf of Guarantee Customers (Tables)

9 Months Ended

Sep. 30, 2016

Guarantee Paid on Behalf of Guarantee Customers [Abstract]

Schedule of guarantee paid on behalf of guarantee customers

	September 30, 2016  (Unaudited)		December 31, 2015
Guarantee paid on behalf of guarantee service customers	$	12,147,982	$	14,031,603
Guarantee paid on behalf of a related party		324,005		622,807
Total	$	12,471,987	$	14,654,410

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2016

Other Assets [Abstract]

Summary of other assets

	September 30, 2016  (Unaudited)		December 31, 2015
Other prepaid expense		11,993		30,809
Deposit for court filing fees and legal fees		219,595		222,934
Other receivables		45,815		39,457
	$	277,403	$	293,200

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Net Investment in Direct Financing Lease (Tables)

9 Months Ended

Sep. 30, 2016

Net Investment in Direct Financing Lease [Abstract]

Schedule of future minimum lease receipts under non-cancellable finance lease arrangements

	September 30, 2016  (Unaudited)			December 31, 2015
Within 1 year	$	3,674,541		$	3,635,411
2 years		73,461			754,810
3 years		-			-
Total minimum lease receipts		3,748,002			4,390,221
Less: amount representing interest		(298,822	)		(464,100	)
Present value of minimum lease receipts	$	3,449,180		$	3,926,121

Summary of components of net investment in direct financing leases

	September 30, 2016  (Unaudited)			December 31, 2015
Total minimum lease payments to be received	$	3,748,002		$	4,390,221
Less: Amounts representing estimated executory costs		-			-
Minimum lease payments receivable		3,748,002			4,390,221
Less Allowance for uncollectible		(2,542,163	)		(2,857,554	)
Net minimum lease payments receivable		1,205,839			1,532,667
Estimated residual value of leased property		-			-
Less: Unearned income		(298,822	)		(355,255	)
Net investment in direct financing lease	$	907,017		$	1,177,442

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2016

Property and Equipment [Abstract]

Summary of property and equipment

	Useful Life  (years)		September 30, 2016  (Unaudited)			December 31, 2015
Furniture and fixtures		5	$	21,665		$	22,260
Vehicles		4		-			153,288
Electronic equipment		3		136,719			140,001
Leasehold improvement		3		297,563			86,418
Less: accumulated depreciation				(335,454	)		(275,847	)
Property and equipment, net			$	120,493		$	126,120

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2016

Intangible Assets [Abstract]

Summary of intangible asset

	Useful Life  (years)	September 30, 2016  (Unaudited)		December 31, 2015
Software	3	$	969	$	4,435

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Short-Term Bank Loans (Tables)

9 Months Ended

Sep. 30, 2016

Short-Term Bank Loans [Abstract]

Summary of short term bank loans

Bank Name	Interest rate	Term		September 30,  2016  (Unaudited)		December 31, 2015
Agricultural Bank Of China	Fixed annual rate of 6.31%		From October 30, 2015 to October 30, 2016		-		2,618,729
				$	-	$	2,618,729

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Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2016

Other Current Liabilities [Abstract]

Schedule of other current liabilities

	September 30, 2016  (Unaudited)			December 31, 2015
Accrued payroll	$	30,938		$	85,144
Accrued office rental expenses		52,472			61,617
Other accrued expenses		24,930			-
Other tax (recoverable)/payable		(46,241	)		14,187
Accrued provision for cash settlement against legal proceedings		225,000			-
Other payable		9,960			21,294
	$	297,059		$	182,242

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Other Operating Expense (Tables)

9 Months Ended

Sep. 30, 2016

Other Operating Expense [Abstract]

Schedule of other operating expense

	For the three months ended				For the nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Depreciation and amortization	$	12,168	$	27,829	$	46,455	$	89,841
Travel expenses		9,647		1,807		13,134		7,669
Entertainment expenses		42		334		11,970		15,604
Promotion expenses		-		-		-		260
Legal and consulting expenses		1,002,804		164,573		1,642,316		998,094
Car expenses		3,726		12,897		21,541		40,813
Bank charges		540		10,613		2,256		33,011
Audit-related expense		31,382		25,329		100,955		255,779
Provision for settlement against legal proceedings		-		-		690,000		-
Other expenses		25,783		104,712		54,400		251,252
Total	$	1,086,092	$	348,094	$	2,583,027	$	1,692,323

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Loss Per Common Share (Tables)

9 Months Ended

Sep. 30, 2016

Loss Per Common Share [Abstract]

Summary of computation of basic and diluted earnings per common share

	For The Three Months Ended						For The Nine Months Ended
	September 30,						September 30,
	2016 (Unaudited)			2015 (Unaudited)			2016 (Unaudited)			2015 (Unaudited)
Net loss attributable to the common shareholders	$	(624,445	)	$	(37,101,946	)	$	(1,206,116	)	$	(40,629,513	)
Basic weighted-average common shares outstanding		15,889,853			12,390,062			14,026,815			12,330,721
Effect of dilutive securities		-			-			-			-
Diluted weighted-average common shares outstanding		15,889,853			12,390,062			14,026,815			12,330,721
Loss  per share:
Basic	$	(0.039	)	$	(2.994	)	$	(0.086	)	$	(3.295	)
Diluted	$	(0.039	)	$	(2.994	)	$	(0.086	)	$	(3.295	)

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Income Taxes and Tax Payable (Tables)

9 Months Ended

Sep. 30, 2016

Income Taxes and Tax Payable [Abstract]

Schedule of income tax payable

	September 30, 2016  (Unaudited)		December 31, 2015
Income tax payable	$	162,206	$	126,485

Schedule of income tax expense

	For the three months ended					For the nine months ended
	September 30,					September 30,
		2016 (Unaudited)		2015 (Unaudited)			2016 (Unaudited)		2015 (Unaudited)
Current income tax (credit)/expense	$	-	$	(53,999	)	$	-	$	7,508
Deferred income tax (credit)/expense		-		(4,610	)		-		587,142
Total provision for income taxes	$	-	$	(58,609	)	$	-	$	594,650

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Related Party Transactions and Balances (Tables)

9 Months Ended

Sep. 30, 2016

Related Party Transactions and Balances [Abstract]

Summary of nature relationships with related parties

Name	Relationship with the Company
Wujiang Chunjia Textile Trading Co., Ltd (“Chunjia Textile”)	Controlled by Huichun Qin
Suzhou Rongshengda Investment Holding Co., Ltd.	Controlled by shareholders of Wujiang Luxiang
Suzhou Dingli Real Estate Co., Ltd.	Controlled by Former Chief Executive Officer
Huichun Qin	Non-controlling shareholder and former CEO and chairman of board of directors

Summary of amount due from related parties

	September 30, 2016 (Unaudited)		December 31, 2015
Suzhou Rongshengda Investment Holding Co., Ltd.	$	1,918,977	$	-
Chunjia Textile		324,005		622,807
Huichun Qin	$	1,049,441	$	1,078,300

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies [Abstract]

Summary of contractual obligations in future periods

	Rental payments (Unaudited)
Year ending September 30, 2017		59,968
Year ending September 30, 2018		71,962
Year ending September 30, 2019		71,962
Year ending September 30, 2020		71,962
Year ending September 30, 2021		47,975
Total	$	323,829

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Organization and Principal Activities (Details) $ / shares in Units, ¥ in Millions, $ in Millions	1 Months Ended		4 Months Ended		9 Months Ended
	Jan. 26, 2015 USD ($)	Jan. 26, 2015 CNY (¥)	Jun. 30, 2014 USD ($)	Jun. 30, 2014 CNY (¥)	Sep. 30, 2016 Customer $ / shares shares	Dec. 31, 2015 $ / shares shares
Organization and Principal Activities (Textual)
Entity Incorporation, Date of Incorporation					Dec. 19, 2011
Number of shareholders | Customer					11
Number of shares acquired by BVI entities | shares					16,137,679	12,390,062
Common Stock, par value | $ / shares					$ 0.001	$ 0.001
Business Cooperation Agreement, description					The Exclusive Business Cooperation Agreement shall remain in effect for ten years unless it is terminated by WFOE with 30-day prior notice.
Board of Directors Chairman [Member]
Organization and Principal Activities (Textual)
Transfer at Issue	$ 1.1	¥ 7
Wujiang Luxiang Shareholders [Member]
Organization and Principal Activities (Textual)
Transfer at Issue			$ 1.1	¥ 7
BVI Entities [Member]
Organization and Principal Activities (Textual)
Number of shares acquired by BVI entities | shares					7,270,920
Common Stock, par value | $ / shares					$ 0.001
Percentage of ownership equity					90.00%
Huichun Qin [Member]
Organization and Principal Activities (Textual)
Percentage of ownership equity					100.00%

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Summary of Significant Accounting Policies (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Summary of Significant Accounting Policies [Abstract]
Balance sheet items, except for equity accounts	$ 6.6702	$ 6.4917

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Summary of Significant Accounting Policies (Details 1) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Summary of Significant Accounting Policies [Abstract]
Items in the statements of income and comprehensive income, and statements of cash flows	$ 6.5802	$ 6.1735

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Summary of Significant Accounting Policies (Details 2) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Summary of Significant Accounting Policies [Abstract]
Guarantee	$ 11,341,455	$ 11,653,342

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Summary of Significant Accounting Policies (Details Textual) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 08, 2016	Apr. 22, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Apr. 27, 2016	Jan. 01, 2015
Summary of Significant Accounting Policies (Textual)
Operating segments, Description			There was no one customer that accounted for more than 10% of the Company's revenue.			There was no one customer that accounted for more than 10% of the Company's revenue.
Restricted cash, Description					The banks providing loans to the Company's guarantee service customers generally require the Company, as the guarantor of the loans, to pledge a cash deposit of 10% to 20% of the guaranteed amount to an escrow account and is restricted from use.
Guarantee obligation expiration period					12 months
Interest reversed			$ 3,955,890		$ 3,955,890		$ 2,593,611
Percentage of salvage value					5.00%
Percentage of loss on financial guarantee contact			50.00%		50.00%		50.00%
Possible credit risk of guarantees			$ 6,015,092		$ 6,015,092		$ 5,691,253
Accrual for financial guarantee services			18,309,981		18,309,981		19,322,557
Accrued specific provisions for repayment					12,294,889		13,631,304
Accumulated deficit			(69,460,635)		(69,460,635)		(68,254,520)
Working capital			2,745,893		2,745,893
Cash and cash equivalents			1,167,361	$ 663,883	1,167,361	$ 663,883	306,401		$ 4,991,973
Short-term borrowings							$ 2,618,729
Reversed provision of amount					$ 385,352	$ 9,035,700
Financial guarantee services			599,808	7,322,936
Charged off amount				$ 262,422
Common stock issued, shares		750,000
Shares issued, price per shares								$ 0.58
Private Placement [Member] | Common Stock [Member]
Summary of Significant Accounting Policies (Textual)
Value of common stock issued	$ 1,000,000
Common stock issued, shares	2,439,025
Shares issued, price per shares	$ 0.41

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Variable Interest Entities and Other Consolidation Matters (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Variable Interest Entities and Other Consolidation Matters [Abstract]
Total assets	$ 20,216,911		$ 20,216,911		$ 22,920,730
Total liabilities	20,267,692		20,267,692		$ 23,932,841
Revenue	672,646	$ 120,929	1,151,308	$ 2,272,057
Net income/(loss)	$ 2,807	$ (36,925,013)	$ 910,203	$ (40,083,818)

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Risks (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Risks (Textual)
Concentration risk, percentage	10.00%	10.00%
Cash of uninsured amount	$ 1,167,361	$ 306,401
General reserve, percentage	1.00%

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Restricted Cash (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Restricted Cash (Textual)
Restricted cash	$ 10	$ 400
Guarantee obligation expiration period	12 months
Maximum [Member]
Restricted Cash (Textual)
Percentage of cash deposit on guaranteed amount	30.00%
Minimum [Member]
Restricted Cash (Textual)
Percentage of cash deposit on guaranteed amount	10.00%

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Loans Receivable, Net (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable	$ 59,540,338	$ 63,076,720
Allowance for loan losses
Collectively assessed	(54,488,203)	(55,595,653)
Individually assessed
Allowance for loan losses	(54,488,203)	(55,595,653)
Loans receivable, net	5,436,035	7,481,067
Business loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable	37,913,015	40,498,813
Personal loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable	$ 21,627,323	$ 22,577,907

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Loans Receivable, Net (Details 1) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual loans by classes of loan portfilio	$ 40,782,260	$ 32,118,910
Business loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual loans by classes of loan portfilio	28,914,735	21,907,409
Personal loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual loans by classes of loan portfilio	$ 11,867,525	$ 10,211,501

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Loans Receivable, Net (Details 2) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
1-89 Days Past Due	$ 18,713,102	$ 1,001,278
90 - 179 Days Past Due	4,950,601	6,161,714
180 - 365 Days Past Due	11,708,609	11,305,249
Over 1 year Past Due	24,123,050	14,651,947
Total Past Due	59,495,362	33,120,188
Current	44,976	29,956,532
Total Loans	59,540,338	63,076,720
Business loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
1-89 Days Past Due	8,998,280	77,021
90 - 179 Days Past Due	4,950,601	4,313,200
180 - 365 Days Past Due	7,080,726	7,555,846
Over 1 year Past Due	16,883,408	10,038,363
Total Past Due	37,913,015	21,984,430
Current		18,514,383
Total Loans	37,913,015	40,498,813
Personal loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
1-89 Days Past Due	9,714,822	924,257
90 - 179 Days Past Due		1,848,514
180 - 365 Days Past Due	4,627,883	3,749,403
Over 1 year Past Due	7,239,642	4,613,584
Total Past Due	21,582,347	11,135,758
Current	44,976	11,442,149
Total Loans	$ 21,627,323	$ 22,577,907

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Loans Receivable, Net (Details 3) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Total Loans receivable by credit quality indicator	$ 59,540,338	$ 63,076,720
Percentage of loan receivable by credit quality indicator	100.00%	100.00%
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans receivable by credit quality indicator
Percentage of loan receivable by credit quality indicator
Special mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans receivable by credit quality indicator
Percentage of loan receivable by credit quality indicator
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans receivable by credit quality indicator		$ 2,695,750
Percentage of loan receivable by credit quality indicator		4.30%
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans receivable by credit quality indicator	$ 10,872,069	$ 9,841,658
Percentage of loan receivable by credit quality indicator	18.30%	15.60%
Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans receivable by credit quality indicator	$ 48,668,269	$ 50,539,312
Percentage of loan receivable by credit quality indicator	81.70%	80.10%

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Loans Receivable, Net (Details 4) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator	$ 59,540,338	$ 63,076,720
Guarantee backed loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator		59,008,573
Pledged assets backed loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator	3,187,180	4,068,147
Collateral backed loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator	56,353,158
Business loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator	37,913,015	40,498,813
Business loans [Member] | Guarantee backed loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator	35,592,373	37,498,183
Business loans [Member] | Pledged assets backed loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator	2,320,642	3,000,630
Business loans [Member] | Collateral backed loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator
Personal loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator	21,627,323	22,577,907
Personal loans [Member] | Guarantee backed loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator	20,760,785	21,510,390
Personal loans [Member] | Pledged assets backed loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator	866,538	1,067,517
Personal loans [Member] | Collateral backed loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans receivable by credit quality indicator

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Loans Receivable, Net (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($) Customer	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) Customer	Sep. 30, 2015 USD ($)	Dec. 31, 2015 Customer
Loans Receivable, Net (Textual)
Financing receivable recorded investment past due			Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days.
Gurantee loans percentage	94.60%		94.60%		93.60%
Provision for loan losses | $	$ (226,694)	$ 29,210,186	$ (133,177)	$ 30,762,076
Minimum [Member]
Loans Receivable, Net (Textual)
Loan interest rate	9.60%	9.60%	9.60%	9.60%
Maximum [Member]
Loans Receivable, Net (Textual)
Loan interest rate	19.44%	19.44%	19.44%	19.44%
Business loans [Member]
Loans Receivable, Net (Textual)
Number of customers	66		66		68
Personal loans [Member]
Loans Receivable, Net (Textual)
Number of customers	42		42		47

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Allowance for Loan Losses (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Allowance for Loan Losses [Line Items]
Beginning balance			$ 55,595,653
Provisions			(133,177)	$ 30,762,076
Foreign exchange impact	$ (271)	$ 1,194	(557)	(8,550)
Ending balance	54,488,203		54,488,203
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	54,488,203		54,488,203
Business loans [Member]
Allowance for Loan Losses [Line Items]
Beginning balance			35,083,738	14,836,650
Ending balance	35,690,296	16,598,522	35,690,296	16,598,522
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	35,690,296	16,598,522	35,690,296	16,598,522
Personal loans [Member]
Allowance for Loan Losses [Line Items]
Beginning balance			20,511,915	9,654,071
Ending balance	18,797,907	9,597,444	18,797,907	9,597,444
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	18,797,907	9,597,444	18,797,907	9,597,444
Allowance for Loan Losses [Member]
Allowance for Loan Losses [Line Items]
Beginning balance	54,488,203	26,195,966	55,595,653	24,490,721
Charge-offs		(41,134,020)		(41,134,020,000)
Recoveries	(172,047)		(129,132)	(56,627)
Provisions	(360)	29,114,410	125,729	30,876,282
Foreign exchange impact	(211,493)		(1,487,947)
Ending balance	54,104,303	14,176,356	54,104,303	14,176,356
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	54,104,303	14,176,356	54,104,303	14,176,356
Allowance for Loan Losses [Member] | Business loans [Member]
Allowance for Loan Losses [Line Items]
Beginning balance	34,326,727	16,598,522	35,083,738	14,836,650
Charge-offs	0	(26,341,752)		(26,341,752)
Recoveries	(50,612)		(127,977)
Provisions	(360)	18,839,288	125,729	20,601,160
Foreign exchange impact	(133,237)		(938,972)
Ending balance	34,142,518	9,096,058	34,142,518	9,096,058
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	34,142,518	9,096,058	34,142,518	9,096,058
Allowance for Loan Losses [Member] | Personal loans [Member]
Allowance for Loan Losses [Line Items]
Beginning balance	20,161,476	9,597,444	20,511,915,000	9,654,071
Charge-offs		(14,792,268)		(14,792,268,000)
Recoveries	(121,435)		(1,155)	(56,627)
Provisions		10,275,122		10,275,122
Foreign exchange impact	(78,256)		(548,975)
Ending balance	19,961,785,000	5,080,298	19,961,785,000	5,080,298
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	$ 19,961,785,000	$ 5,080,298	$ 19,961,785,000	$ 5,080,298

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Allowance for Loan Losses (Details 1) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 59,540,338	$ 63,076,720
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Special mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans		2,695,750
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	10,872,069	9,841,658
Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	48,668,269	50,539,312
Business Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	37,913,015	40,498,813
Business Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Business Loans [Member] | Special mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Business Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans		2,618,729
Business Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,540,994	6,103,192
Business Loans [Member] | Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	30,372,021	31,776,892
Personal Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	21,627,323	22,577,907
Personal Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Personal Loans [Member] | Special mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Personal Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	75,252
Personal Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,331,075	3,738,466
Personal Loans [Member] | Loss [Member]
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 18,296,248	$ 18,762,420

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Allowance for Loan Losses (Details Textual)	Sep. 30, 2016
Allowance for Loan Losses (Textual)
Minimum percentage of loan in general reserve	1.00%

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Guarantee Paid on Behalf of Guarantee Customers (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Guarantee Paid on Behalf of Guarantee Customers [Abstract]
Guarantee paid on behalf of guarantee service customers	$ 12,147,982	$ 14,031,603
Guarantee paid on behalf of a related party	324,005	622,807
Total	$ 12,471,987	$ 14,654,410

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Guarantee Paid on Behalf of Guarantee Customers (Details Textual) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Guarantee Paid on Behalf of Guarantee Customers (Textual)
Accrual for financial guarantee services	$ 18,309,981	$ 19,322,557

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Other Assets (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Other Assets [Abstract]
Other prepaid expense	$ 11,993	$ 30,809
Deposit for court filing fees and legal fees	219,595	222,934
Other receivables	45,815	39,457
Other Assets	$ 277,403	$ 293,200

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Net Investment in Direct Financing Lease (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Future minimum lease receipts under non-cancellable finance lease
Within 1 year	$ 3,674,541	$ 3,635,411
2 years	73,461	754,810
3 years
Total minimum lease receipts	3,748,002	4,390,221
Less: amount representing interest	(298,822)	(464,100)
Present value of minimum lease receipts	$ 3,449,180	$ 3,926,121

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Net Investment in Direct Financing Lease (Details 1) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Components of the Company' s net investment in direct financing leases
Total minimum lease payments to be received	$ 3,748,002	$ 4,390,221
Less: Amounts representing estimated executory costs
Minimum lease payments receivable	3,748,002	4,390,221
Less Allowance for uncollectible	(2,542,163)	(2,857,554)
Net minimum lease payments receivable	1,205,839	1,532,667
Estimated residual value of leased property
Less: Unearned income	(298,822)	(355,255)
Net investment in direct financing lease	$ 907,017	$ 1,177,442

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Net Investment in Direct Financing Lease (Details Textual) - USD ($) $ in Thousands	Oct. 13, 2014	Sep. 25, 2014
Net Investment in Direct Financing Lease (Textual)
Total lease receivable	$ 2,880	$ 2,730
Lease bears an interest rate per annum	11.11%	10.36%

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Property and Equipment (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Furniture and fixtures	$ 21,665	$ 22,260
Vehicles		153,288
Electronic equipment	136,719	140,001
Leasehold improvement	297,563	86,418
Less: accumulated depreciation	(335,454)	(275,847)
Property and equipment, net	$ 120,493	$ 126,120
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Useful Life (years)	5 years
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Useful Life (years)	4 years
Electronic equipment [Member]
Property, Plant and Equipment [Line Items]
Useful Life (years)	3 years
Leasehold improvement [Member]
Property, Plant and Equipment [Line Items]
Useful Life (years)	3 years

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Property and Equipment (Details Textual)	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) vehicle	Sep. 30, 2015 USD ($) vehicle
Property and Equipment (Textual)
Percentage of salvage value of property and equipment	5.00%		5.00%
Depreciation expense	$ 11,053	$ 27,107	$ 43,062	$ 81,245
Noninterest Income		19,439	$ 48,945	$ 34,024
Vehicles [Member]
Property and Equipment (Textual)
Number of vehicles | vehicle			1	2
Net book value of vehicles	7,459	4,073	$ 7,459	$ 4,073
Original cost of vehicles	$ 149,767	$ 81,459	149,767	81,459
Accumulated depreciation			$ 141,727	$ 77,386

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Intangible Assets (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Intangible Assets [Abstract]
Useful Life (years)	3 years
Software	$ 969	$ 4,435

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Intangible Assets (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Intangible Assets (Textual)
Software, estimated useful life			3 years
Amortization expense	$ 1,115	$ 1,205	$ 3,393	$ 8,596

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Short-Term Bank Loans (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Short-term Debt [Line Items]
Short-term bank loans		$ 2,618,729
Agricultural Bank of China [Member] | From October 30, 2015 to October 30, 2016 [Member]
Short-term Debt [Line Items]
Fixed annual interest rate	6.31%
Short-term bank loans		$ 2,618,729

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Short-Term Bank Loans (Details Textual) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Short-Term Bank Loans (Textual)
Short-term bank loan maturity term					1 year
Interest expense incurred on short-term loans		$ 152,664	$ 30,057	$ 325,830

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Unearned Income from Guarantee Services and Financing Lease Services (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Unearned Income From Guarantee Services and Financing Lease Services (Textual)
Unearned income from guarantee services	$ 12,044	$ 1,610
Unearned income from financing leasing services	$ 24,362	$ 59,692

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Other Current Liabilities (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Other Current Liabilities [Abstract]
Accrued payroll	$ 30,938	$ 85,144
Accrued office rental expenses	52,472	61,617
Other accrued expenses	18,309,981	19,322,557
Other tax (recoverable)/payable	(46,241)	14,187
Accrued provision for cash settlement against legal proceedings	225,000
Other payable	9,960	21,294
Other current liabilities total	$ 297,059	$ 182,242

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Other Current Liabilities (Details Textual)	Apr. 22, 2016 USD ($) shares
Other Current Liabilities (Textual)
Accrued liability | $	$ 225,000
Settlement of additional paid in capital, shares | shares	750,000
Stipulation and agreement of settlement description	Pursuant to the Stipulation, CCCR shall cause (a) $225,000 to be transferred to the Escrow Agent within fifteen (15) business days of the later of: (i) the Court's entry of the Order for Notice and Hearing (or substantially similar order) as set forth in this Stipulation; or (ii) Lead Counsel provision to Settling Defendants' Counsel of written payment instructions and a completed W-9 form; and (b) Cause CCCR to issue 750,000 shares of freely tradeable shares of CCCR common stock (the "Settlement Stock") to the Escrow Agent within fifteen (15) business days of the Court's entry of the Order for Notice and Hearing (or substantially similar order) as set forth in this Stipulation.

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Other Operating Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Other Operating Expense [Abstract]
Depreciation and amortization	$ 12,168	$ 27,829	$ 46,455	$ 89,841
Travel expenses	9,647	1,807	13,134	7,669
Entertainment expenses	42	334	11,970	15,604
Promotion expenses				260
Legal and consulting expenses	1,002,804	164,573	1,642,316	998,094
Car expenses	3,726	12,897	21,541	40,813
Bank charges	540	10,613	2,256	33,011
Audit-related expense	31,382	25,329	100,955	255,779
Provision for settlement against legal proceedings			690,000
Other expenses	25,783	104,712	54,400	251,252
Total	$ 1,086,092	$ 348,094	$ 2,583,027	$ 1,692,323

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Employee Retirement Benefit (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Employee Retirement Benefit (Textual)
Employee retirement benefit contributions	$ 4,532	$ 15,109	$ 27,520	$ 52,743

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Distribution of Profit (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Distribution of Profit (Textual)
Dividend distribute to shareholders

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Capital Transaction (Details)								1 Months Ended			7 Months Ended	9 Months Ended	15 Months Ended
	Sep. 14, 2016 USD ($) $ / shares shares	Jun. 08, 2016 USD ($) $ / shares shares	Jan. 13, 2016 USD ($) $ / shares shares	Jun. 12, 2014 USD ($) shares	May 13, 2014 $ / shares shares	Aug. 26, 2013 USD ($) $ / shares shares	Aug. 16, 2013 USD ($) $ / shares shares	Apr. 27, 2016 USD ($) $ / shares shares	Apr. 22, 2016 shares	Apr. 15, 2016 USD ($) $ / shares shares	May 08, 2013 USD ($) Investors shares	Sep. 30, 2016 shares	Apr. 01, 2013 USD ($) Investors shares	Dec. 31, 2015 shares	Feb. 10, 2014 $ / shares shares
Class of Stock [Line Items]
Warrants issued to purchase common stock					252,500
Common stock, shares authorized												100,000,000		100,000,000
Common stock, shares issued												16,137,679		12,390,062
Common stock, shares outstanding												16,137,679		12,390,062
Common stock issued, shares									750,000
Shares issued, price per shares | $ / shares								$ 0.58
Warrants exercisable at a per share price | $ / shares					$ 4.80
Stock issued during period for Services | $								$ 211,700
Beneficial conversion feature upon conversion | $							$ 752,500
Restricted Stock [Member]
Class of Stock [Line Items]
Value of common stock issued | $	$ 771,000
Common stock issued, shares	300,000
Shares issued, price per shares | $ / shares	$ 2.57
Wujiang Luxiang Shareholders [Member]
Class of Stock [Line Items]
Stock issued during period for Services, Shares								155,000
Jingeng Ling [Member]
Class of Stock [Line Items]
Stock issued during period for Services, Shares								195,000
John Levy [Member]
Class of Stock [Line Items]
Shares issued, price per shares | $ / shares			$ 0.32
Stock issued during period for Services | $			$ 1,920
Stock issued during period for Services, Shares			6,000					15,000
Pearlman Schenider LLP [Member]
Class of Stock [Line Items]
Shares issued, price per shares | $ / shares										$ 0.58
Stock issued during period for Services | $										$ 369,803
Stock issued during period for Services, Shares										637,592
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Proceeds from private placement | $													$ 372,500
Number of investors | Investors													11
Preferred stock, shares authorized												1,000,000		1,000,000
Cost related to private placement | $													$ 93,125
Additional preferred shares issued													745
Series A stock and Series B Stock converted into common stock							348,462
Amortization of beneficial conversion feature relating to convertible Preferred Shares												The number of shares of Common Stock issued upon conversion of the Series A Stock was equal to the purchase price of the Series A Stock divided by a per share conversion price of 50% of the price of a share of Common Stock in the IPO.
Per share conversion price of Series A and Series B Stock | $ / shares							$ 3.25
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Proceeds from private placement | $											$ 380,000
Number of investors | Investors											44
Preferred stock, shares authorized												5,000,000		5,000,000
Cost related to private placement | $											$ 95,000
Additional preferred shares issued											760
Series A stock and Series B Stock converted into common stock							348,462
Amortization of beneficial conversion feature relating to convertible Preferred Shares												The number of shares of Common Stock issued upon conversion of the Series B Stock was equal to the purchase price of the Series B Stock divided by a per share conversion price of 25% of the price of a share of Common Stock in the IPO.
Per share conversion price of Series A and Series B Stock | $ / shares							$ 1.63
Initial Public Offering [Member]
Class of Stock [Line Items]
Sale of public offering price per share | $ / shares						$ 6.50
Offering shares closed							1,370,000
Sale of additional shares of Common stock						45,657
Cash received from private placement | $						$ 7,600,000
Proceeds from private placement | $						$ 9,200,000
Follow-on Public Offering [Member]
Class of Stock [Line Items]
Sale of public offering price per share | $ / shares					$ 3.99
Cash received from private placement | $				$ 5,700,000
Shares issued for public offering					1,750,000
Issuance of stock and warrants				252,000	1,750,000
Warrants issued to purchase common stock				126,250	875,000
Common stock, shares issued					99,614
Common stock issued, shares					1,650,386
Warrants exercisable at a per share price | $ / shares					$ 0.01
Proceeds from public offering | $				$ 6,600,000
Maximum [Member]
Class of Stock [Line Items]
Common stock, shares authorized												100,000,000
Preferred stock, shares authorized												10,000,000
Warrant [Member] | Initial Public Offering [Member]
Class of Stock [Line Items]
IPO underwriters' and their affiliates' warrants															95,900
Warrants exercisable at a per share price | $ / shares															$ 6.50
Warrant [Member] | Follow-on Public Offering [Member]
Class of Stock [Line Items]
Warrants issued to purchase common stock					875,000
Warrants exercisable at a per share price | $ / shares					$ 0.01
Additional Paid-in Capital [Member]
Class of Stock [Line Items]
Warrants exercisable at a per share price | $ / shares					$ 5.60
Common Stock [Member] | Private Placement [Member]
Class of Stock [Line Items]
Value of common stock issued | $		$ 1,000,000
Common stock issued, shares		2,439,025
Shares issued, price per shares | $ / shares		$ 0.41

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Statutory Reserve (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statutory Reserve [Textual]
Percentage of reserve to be allocated after tax by foreign-invested enterprise			10.00%
Percentage of reserve to be allocated after tax			15.00%
Percentage of reserve out of registered capital			50.00%
Accrue the statutory reserve due to net loss

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Loss Per Common Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Loss Per Common Share [Abstract]
Net loss attributable to the common shareholders	$ (624,445)	$ (37,101,946)	$ (1,206,116)	$ (40,629,513)
Basic weighted-average common shares outstanding	15,889,853	12,390,062	14,026,815	12,330,721
Effect of dilutive securities
Diluted weighted-average common shares outstanding	15,889,853	12,390,062	14,026,815	12,330,721
Loss per share:
Basic	$ (0.039)	$ (2.994)	$ (0.086)	$ (3.295)
Diluted	$ (0.039)	$ (2.994)	$ (0.086)	$ (3.295)

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Income Taxes and Tax Payable (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Income Taxes and Tax Payable [Abstract]
Income tax payable	$ 162,206	$ 126,485

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Income Taxes and Tax Payable (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Taxes and Tax Payable [Abstract]
Current income tax (credit)/expense		$ (53,999)		$ 7,508
Deferred income tax (credit)/expense		(4,610)	(40,364)	587,141
Total provision for income taxes		$ (58,609)		$ 594,650

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Income Taxes and Tax Payable (Details Textual) - USD ($)

9 Months Ended

12 Months Ended

Sep. 30, 2016

Sep. 30, 2015

Dec. 31, 2015

Income Taxes and Tax Payable (Textual)

Uniform tax rate

25.00%

Preferential tax rate

12.50%

Income tax examination, Description

Company pays enterprise income taxes at rate of 25% on a quarterly basis, and upon annual tax settlement done by the Company and the tax authority in five (5) months after December 31 the tax authority will refund the Company the excess enterprise income taxes it paid beyond the rate of 12.5%.

Net tax operating loss

$ 422,684

Operating loss carry-forward

$ 61,463,690

Increase to its liability for unrecognized tax benefit

Next 12 months

Operating loss expiration date

December 31, 2019 to 2021

Deferred income tax assets

$ 11,739,850

Valuation allowance for deferred income tax assets

$ 11,739,850

Effective tax rate

0.00%

1.49%

Actual loan losses receives period from subsidy

5 years

Deferred tax liability

$ 158,980

$ 204,266

Subsidiary due

$ 1,010,391

$ 1,011,877

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Related Party Transactions and Balances (Details)	9 Months Ended
	Sep. 30, 2016
Chunjia Textile [Member]
Related Party Transaction [Line Items]
Relationship with the Company	Controlled by Huichun Qin
Suzhou Rongshengda Investment Holding Co., Ltd. [Member]
Related Party Transaction [Line Items]
Relationship with the Company	Controlled by shareholders of Wujiang Luxiang
Suzhou Dingli Real Estate Co., Ltd [Member]
Related Party Transaction [Line Items]
Relationship with the Company	Controlled by Former Chief Executive Officer
Huichun Qin [Member]
Related Party Transaction [Line Items]
Relationship with the Company	Non-controlling shareholder and former CEO and chairman of board of directors

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Related Party Transactions and Balances (Details 1) ¥ in Millions	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jul. 02, 2014 USD ($)	Jul. 02, 2014 CNY (¥)
Related Party Transaction [Line Items]
Amount due from related parties	$ 1,918,977
Suzhou Rongshengda Investment Holding Co Ltd [Member]
Related Party Transaction [Line Items]
Amount due from related parties	1,918,977
Chunjia Textile [Member]
Related Party Transaction [Line Items]
Amount due from related parties	324,005	622,807
Huichun Qin [Member]
Related Party Transaction [Line Items]
Amount due from related parties	$ 1,053,530	$ 1,078,300	$ 1,098,197	¥ 7

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Related Party Transactions and Balances (Details Textual) ¥ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jul. 02, 2014 USD ($)	Jul. 02, 2014 CNY (¥)
Related Party Transactions and Balances (Textual)
Amount due from related parties	$ 1,918,977
Accrued provision	12,294,889	13,631,304
Chunjia Textile [Member]
Related Party Transactions and Balances (Textual)
Amount due from related parties	324,005	622,807
Accrued provision	162,002
Huichun Qin [Member]
Related Party Transactions and Balances (Textual)
Amount due from related parties	1,053,530	1,078,300	$ 1,098,197	¥ 7
Suzhou Rongshengda Investment Holding Co Ltd [Member]
Related Party Transactions and Balances (Textual)
Amount due from related parties	1,918,977
Loan related party	$ 1,945,224

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Commitments and Contingencies (Details)	Sep. 30, 2016 USD ($)
Commitments and Contingencies [Abstract]
Year ending September 30, 2017	$ 59,968
Year ending September 30, 2018	71,962
Year ending September 30, 2019	71,962
Year ending September 30, 2020	71,962
Year ending September 30, 2021	47,975
Total	$ 323,829

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Commitments and Contingencies (Details Textual)		1 Months Ended	9 Months Ended
	Aug. 06, 2014 USD ($)	Mar. 16, 2016 USD ($)	Sep. 30, 2016 USD ($) Lawsuits	Dec. 31, 2015 USD ($)
Commitments and Contingencies (Textual)
Lease commitments description			Lease agreement from June 1, 2015 to May 31, 2021. As a result, in October 2015, the Company terminated the lease agreement for its former principal office which agreement was to expire on September 30, 2018.
Average guarantee expiration terms			12 to 24 months
Loan guarantees amount | $			$ 11,341,455	$ 11,653,342
Number of lawsuit | Lawsuits			123
Loan paid behalf of loan guarantee customers | $	$ 5,400,000
Escrow fund deposit | $		$ 200,000
Weighted average trading price description		80% of the 30 day volume weighted average Trading Price ("VWAP") for each of the 30 consecutive trading days prior to the date of the Agreement.
WFOE filed a civil complaint against Huichun Qin			On May 18, 2015, WFOE filed a civil complaint against Huichun Qin with the Wujiang Region Suzhou City People's Court claiming Mr. Qin's misappropriation of RMB 7 million in July 2014.
Litigation description			The Company initiated legal proceedings to collect delinquent balances from borrowers and guarantees. 88 of these cases with an aggregated claim of USD 42.14 million have been adjudicated by the Court in favor of the Company and these cases are settled or in the process of enforcement. The remaining 35 cases with an aggregated claim of USD 29 million have not been adjudicated by the Court as of September 30, 2016.
Guarantee business [Member]
Commitments and Contingencies (Textual)
Number of lawsuit | Lawsuits			38
Loan business [Member]
Commitments and Contingencies (Textual)
Number of lawsuit | Lawsuits			85
Minimum [Member]
Commitments and Contingencies (Textual)
Average percentage of guarantee amount as security deposit			10.00%
Maximum [Member]
Commitments and Contingencies (Textual)
Average percentage of guarantee amount as security deposit			20.00%

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Subsequent Event (Details) - USD ($)

Nov. 04, 2016

Sep. 30, 2016

Dec. 31, 2015

Subsequent Event [Line Items]

Stockholders' equity value

$ 2,708,375

$ 860,661

Subsequent Event [Member]

Subsequent Event [Line Items]

Net income from continuing operations

$ 500,000

Stockholders' equity value

$ 2,500,000

Securities notice, description

Nasdaq 5550(b)(2) requires listed companies to maintain a minimum Market Value of Listed Securities of at least $35 million. Further, as of November 4, 2016, the Company did not meet the alternative compliance standards under Nasdaq Listing Rule 5550(b) of (i) net income from continuing operations of $500,000 in its last completed fiscal year or in two of the last three fiscal years, or (ii) stockholders' equity of at least $2.5 million.

Security notes expiry period, description

The notification letter has no immediate effect on the Company’s listing on the Nasdaq Capital Market. Nasdaq provided the Company a compliance period of 180 calendar days, or until May 3, 2017, to regain compliance.