Note 7 - Prepayments and Deposit to Suppliers

9 Months Ended

Sep. 30, 2015

Prepayments And Deposits To Suppliers Disclosure [Abstract]

Prepayments And Deposits To Suppliers Disclosure [Text Block]

7. Prepayments and deposit to suppliers

	September 30, 2015		December 31, 2014
	US$(’000)		US$(’000)
	(Unaudited)
Deposits to TV advertisement and internet resources providers		1,365		3,575
Prepayments to TV advertisement and internet resources providers		4,326		4,451
Other deposits and prepayments		56		66
		5,747		8,092

In order to provide advertising and marketing services, the Company partners with TV stations or its agents to obtain time slots for resale through broadcast advertisements to advertise brands, business information, products and services of its clients. The Company also purchases internet resources from large internet search engines to attract more internet traffic to its advertising portals and provide value-added services to its clients.

Deposits to TV advertisement and internet resources providers are paid as contractual deposits to the Company’s resources and services suppliers.

As of September 30, 2015, deposit to suppliers primarily consisted of the contractual deposits of approximately US$0.64 million to two of the Company’s largest internet resources suppliers and the contractual deposits of approximately US$0.73 million for the purchasing of TV advertising time slots.

According to the contracts signed between the Company and its suppliers, the Company is normally required to pay the contract amounts in advance. These prepayments will be transferred to cost of sales when the related services are provided.

As of September 30, 2015, prepayment to suppliers primarily consisted of approximately US$2.92 million prepayments to the Company’s internet resources suppliers and approximately US$1.41 million prepayment for the purchasing of TV advertising time slots. This US$1.41 million advanced payment was carried forward from previous years and was paid to a TV station which had been partnered with the Company for over five years. In response to the restrictions on TV shopping infomercial implemented by the related government authorities, which resulted in the decrease in the Company’s TV advertisement revenue, the Company discussed with the TV station possible alternatives of applying the balance of the advanced payment, as the amount was unlikely to be refunded to the Company, due to internal administrative policies of the TV station. The TV station and the Company agreed that the unconsumed advanced payment balance can be consumed by any third parties designated by the Company and approved by the TV station, who will broadcast advertisements or other similar TV programs using the balance of available time slots, and the Company will directly collect the amounts from the third parties for the time slots they utilized. In November 2015, the Company collected an additional US$0.78 million of this amount. The Company expects that the remaining advanced payment balance will be fully utilized within 2015.