Note 1 - Organization and Nature of Operations

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Nature of Operations [Text Block]

1. Organization and nature of operations

ChinaNet Online Holdings, Inc. (the “Company”) was incorporated in the State of Texas in

April 2006

and re-domiciled to become a Nevada corporation in

October 2006.

On

June 26, 2009,

the Company consummated a share exchange transaction with China Net Online Media Group Limited (the “Share Exchange”), a company organized under the laws of British Virgin Islands (“China Net BVI”). As a result of the Share Exchange, China Net BVI became a wholly owned subsidiary of the Company and the Company is now a holding company, which, through certain contractual arrangements with operating companies in the People’s Republic of China (the “PRC”), is engaged in providing advertising, precision marketing, online to offline (

O2O

) sales channel expansion and the related data services to small and medium enterprises (“SMEs”) and entrepreneurial management and networking services for entrepreneurs in the PRC. In

January 2018,

the Company announced its expansion into the blockchain industry and the related technology. The Company aims to develop credible, traceable and highly secured blockchain applications for the large demand from the SMEs and gradually shift from an information services provider to a transaction services provider for business opportunities in the near future.

As of

June 30, 2018,

the Company operated its business primarily in China through its PRC subsidiaries and operating entities, or Variable Interest Entities (“VIEs”) as discussed in the Company’s Annual Report on Form

10

-K for the fiscal year ended

December 31, 2017,

previously filed with the Securities and Exchange Commission (the

“2017

Form

10

-K”) on

April 16, 2018.

On

January 17, 2018,

the Company consummated a registered direct offering of

2,150,001

shares of the Company’s common stock to certain institutional investors at a purchase price of

$5.15

per share (“the Financing”). As part of the transaction, the Company also issued to the investors warrants for the purchase of up to

645,000

shares of the Company’s common stock at an exercise price of

$6.60

per share. The warrants have a term of

30

months from the date of issuance. The Company received gross proceeds of approximately

$11.1

million (See Note

20

).

In

May 2018,

the Company, through its wholly owned subsidiary in the PRC, incorporated a new majority-owned subsidiary, Business Opportunity Chain (Beijing) Technology Development Co., Ltd. (“Business Opportunity Chain”) with

three

unrelated parties. The registered capital of Business Opportunity Chain is

RMB10

million (approximately

US$1.5

million) and the Company beneficially owns

51%

equity interest in this entity. Business Opportunity Chain was established to provide research and develop and other technical support for the Company’s blockchain business units. As of the date hereof, Business Opportunity Chain is still in its start-up stage.