Note 24 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Text Block]

24.	Commitments and contingencies

The following table sets forth the Company’s operating lease commitment as of September 30, 2016:

	Office Rental
	US$(’000)
	(Unaudited)
Three months ending December 31,
-2016		137
Year ending December 31,
-2017		550
-2018		549
-2019		111
Total	$	1,347

Excluding rental expenses included in discontinued operation, for the nine months ended September 30, 2016 and 2015, rental expenses under operating leases were approximately US$447,000 and US$319,000, respectively. For the three months ended September 30, 2016 and 2015, rental expenses under operating leases were approximately US$137,000 and US$109,000, respectively.

In May 2015, the Company entered into a contract to purchase software products related to cloud video management system from an unrelated third party with a total contract amount of RMB9.5 million (approximately US$1.4 million). As of September 30, 2016, the Company had paid in the aggregate of RMB6.65 million (approximately US$1.0 million) in accordance with the payment schedule set forth in the contract. The transaction as contemplated under the contract is expected to be consummated in 2016 and the remaining unpaid contract amount is expected to be paid in 2016.

In accordance with the contract entered into between the Company and one of its largest internet resources suppliers, the Company agreed to purchase in the aggregate of RMB100 million (“the minimum consumption amount”) (approximately US$15.1 million) from this supplier for a one-year period commencing on June 13, 2015. In accordance with this contract, if the Company fails to meet the minimum consumption amount, the supplier is allowed to require the Company to retroactively compensate the supplier in cash the difference between the granted discount rate set forth based on the minimum consumption amount and any revised discount rate set forth based on further negotiation between the two parties, if the Company is able to achieve 50% of the minimum consumption amount. If the Company fails to achieve 50% of the minimum consumption amount, the Company is not eligible to enjoy any discount. The contract expired on June 12, 2016, based on the final agreed compensation plan between the two parties, the Company compensated the supplier approximately US$0.13 million for failing to meet the minimum consumption amount, which equaled to the deposit withheld by the supplier upon entering into the original contract in June 2015.

Legal Proceedings

On October 26, 2015, Business Opportunity Online, one of the Company’s indirect wholly owned VIEs, filed a civil action against Beijing 58 Information Technology Co., Ltd. (“Beijing 58”) in the Chaoyang District People’s Court of Beijing. Business Opportunity Online is seeking a court order to establish that it owns a 17.5% equity interest in Beijing 58, one of the VIEs owned by 58.com Inc. On January 20, 2016, the Chaoyang District People’s Court of Beijing rendered its ruling that Business Opportunity Online did not own 17.5% equity interest in Beijing 58. On February 15, 2016, Business Opportunity Online appealed the decision in the Beijing Third Intermediate People’s Court. On May 30, 2016, the Beijing Third Intermediate People’s Court rendered its final ruling that Business Opportunity Online did not own 17.5% equity interest in Beijing 58.