Note 15 - Payable For Acquisition of Noncontrolling Interest

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Noncontrolling Interest Disclosure [Text Block]

15. Payable for acquisition of noncontrolling interest

In

March 2018,

the Company entered into an agreement with the noncontrolling interest holder of Chuang Fu Tian Xia to purchase the remaining

49%

equity interest of Chuang Fu Tian Xia for a total consideration of

RMB15

million (approximately

US$2.3

million), of which

50%

of the total consideration need to be paid in cash and the remaining

50%

of the total consideration would be paid in form of the Company’s common stock. As of

June 30, 2018,

the Company had paid the cash part of the consideration,

RMB7.5

million (approximately

US$1.1

million), as a prepayment to the noncontrolling interest holder of Chuang Fu Tian Xia. The counterparty is required to complete the registration of the transfer of equity interest with the local branch of the State Administration of Industry and Commerce before the Company shall pay the remaining consideration in form of the Company’s common stock.

In

May 2018,

the purchase of the

49%

equity interest in Chuang Fu Tian Xia was registered with the local branch of the State Administration of Industry and Commerce, which represented the official transfer of the

49%

equity interest from the noncontrolling interest to the Company.

In early

July 2018,

the Company and the noncontrolling interest holder of Chuang Fu Tian Xia entered into an amendment agreement related to this transaction, pursuant to which, the

two

parties agreed to change the total consideration from

RMB15

million to

RMB12.5

million, and agreed to amend the form of settlement of the unpaid consideration of

RMB5.0

million (approximately

US$0.76

million) from the Company’s Common Stock to cash. In accordance with the amendment agreement, the Company has paid

RMB3.5

million (approximately

US$0.53

million) on

July 31, 2018

and the remaining

RMB1.5

million (approximately

US$0.23

million) will be paid before

August 31, 2018.

The Company accounted for this transaction as an equity transaction with

no

gain or loss to be recognized in its consolidated statement of operations. The carrying amount of the noncontrolling interest was adjusted to reflect the change in its ownership interest in the subsidiary, the difference between the fair value of the consideration paid and the amount by which the noncontrolling interest is adjusted was recognized in equity attributable to the parent and the subsidiary’s accumulated comprehensive income was reallocated among the parent and the noncontrolling interest through an adjustment to the parent’s equity.