Note 2 - Variable Interest Entities

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Variable Interest Entities Disclosure [Text Block]

2. Variable interest entities

Summarized below is the information related to the consolidated VIEs’ assets and liabilities as of September 30, 2016 and December 31, 2015, respectively:

	September 30, 2016		December 31, 2015
	US$(’000)		US$(’000)
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,134	$	4,942
Term deposit		3,175		3,265
Accounts receivable, net		3,477		2,492
Other receivables, net		313		1,712
Prepayment and deposit to suppliers		6,750		5,841
Due from related parties		351		24
Other current assets		8		27
Assets classified as held for sale		1,764		1,882
Total current assets		16,972		20,185
Long-term investments		194		1,113
Property and equipment, net		301		503
Intangible assets, net		4,562		5,630
Deposit and prepayment for purchasing of software technology		996		1,024
Goodwill		4,275		4,396
Deferred tax assets-non current		1,003		1,249
Total Assets	$	28,303	$	34,100
Liabilities
Current liabilities:
Short-term bank loan	$	449	$	-
Accounts payable		99		88
Advances from customers		1,177		1,304
Accrued payroll and other accruals		260		309
Due to Control Group		10		11
Taxes payable		2,617		2,733
Other payables		181		67
Liabilities classified as held for sale		710		913
Total current liabilities		5,503		5,425
Deferred tax Liabilities-non current		29		118
Total Liabilities	$	5,532	$	5,543
Commitments and contingencies		-		129

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.

Summarized below is the information related to the financial performance of the VIEs reported in the Company’s condensed consolidated statements of operations and comprehensive loss for the nine and three months ended September 30, 2016 and 2015, respectively:

	Nine Months Ended September 30,
	2016			2015
	US$(’000)			US$(’000)
Revenues	$	25,289		$	23,499
Cost of revenues		(19,186	)		(19,234	)
Total operating expenses		(6,384	)		(7,821	)
Loss from discontinued operations		(60	)		(204	)
Net loss before allocation to noncontrolling interests		(603	)		(2,993	)

F- 8

CHINANET ONLINE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	Three Months Ended September 30,
	2016			2015
	US$(’000)			US$(’000)
Revenues	$	11,902		$	8,422
Cost of revenues		(9,872	)		(7,047	)
Total operating expenses		(2,290	)		(2,959	)
Loss from discontinued operations		-			(95	)
Net loss before allocation to noncontrolling interests		(343	)		(1,283	)