Note 14 - Intangible assets, net

9 Months Ended

Sep. 30, 2011

Intangible Assets Disclosure [Text Block]

14.   Intangible assets, net

	September 30, 2011		December 31, 2010
	US$(’000)		US$(’000)
	(Unaudited)
Intangible assets not subject to amortization:
Trade Name		305		-
Intangible assets subject to amortization:
Contract Backlog		194		-
Customer Relationship		1,307		-
Non-Compete Agreement		195		-
Cloud-compute based software platforms		1,450		-
Computer software		75		61
Total intangible assets		3,526		61
Less: accumulated amortization		329		10
		3,197		51

Contract backlog, Customer relationship and Non-compete agreement were acquired through the acquisition transactions of Quanzhou Zhi Yuan and Quanzhou Tian Xi Shun He as described in Note 4.

On July 1, 2011, one of the Company’s VIEs, Business Opportunity Online Hubei, and an individual who was not affiliated with the Company formed a new company, Sheng Tian Network Technology (Hubei) Co., Ltd (“Sheng Tian Hubei”), which was 51% owned by Business Opportunity Online Hubei and 49% owned by this individual. In addition, Business Opportunity Online Hubei, entered into a software platform and technology purchase agreement with this individual. The agreement provides that the purchase price shall be based on the valuation of RMB18,200,000 (approximately US$2,843,000), and Business Opportunity Online shall pay RMB9,282,000 (approximately US$1,450,000) and hence own 51% of these software platforms and the related technology. The agreement stipulates that the seller shall transfer all software platforms and the related documentations to Sheng Tian Hubei and provide assistance for the registration of the software platforms and the related technology in the name of Sheng Tian Hubei. The agreement also provides that the seller shall dismiss all human resources for the business activities related to the software platforms from the date of this agreement and provide assistance for Sheng Tian Hubei to re-employ the necessary technology staff from the seller upon establishment of Sheng Tian Hubei to ensure a smooth transitioning of the activities related to the software platforms. These software platforms are all based on the cloud-compute technology and will be further consolidated and integrated into the Company’s advertising and marketing platform and mainly, management tools platform and packed into different value-added services to be provided to its clients. These cloud-compute technology based software platforms were recorded at cost and amortized on a straight line basis for an estimated economic life of ten years.

Amortization expenses in aggregate for the three months ended September 30, 2011 and 2010 were approximately US$116,000 and US$1,000, respectively.

Based on the carrying value of the finite-lived intangible assets recorded as of September 30, 2011, and assuming no subsequent impairment of the underlying intangible assets, the estimated future amortization expenses for the three months ending December 31, 2011 is approximately US$141,000, and approximately US$337,000 per annual from fiscal year 2012.