26.	Discontinued operation

As discussed in Note

in the

fourth

quarter of

2015,

the Company exited its brand management and sales channel building business segment, operated by

one

of its VIEs, Quanzhou City Zhilang Network Technology Co., Ltd. (“Quanzhou Zhi Lang”), which qualified for presentation as a discontinued operation. In

June

2016,

the Company disposed Quanzhou Zhi Lang to an unaffiliated

third

-party, the loss incurred from the disposal was also included in results of operations from discontinued operation during the period. Major classes of line items constituting pre-tax net loss and net loss of the discontinued operation for the years ended

December

31,

2016

and

2015,

respectively, are as follows:

	Year Ended December 31,
	2016			2015
	US$(’000)			US$(’000)

Revenues		-			272
Cost of revenues		-			149
Total operating expenses		50			359
Impairment on intangible assets		-			169
Impairment on goodwill		-			1,117
Net loss before income tax benefit		(50	)		(1,522	)
Income tax benefit		-			57
Loss from discontinued operation, net of income tax		(50	)		(1,465	)
Loss on disposal of discontinued operation, net of income tax		(9	)		-
Net loss		(59	)		(1,465	)

For the years ended

December

31,

2016

and

2015,

depreciation and amortization expenses included in operating expenses of the discontinued operation was approximately US$nil and

US$63,000,

respectively. There were

significant capital expenditures, operating or investing noncash items incurred in the discontinued operation for the years ended

December

31,

2016

2015.