Note 25 - Subsequent Event

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

25. Subsequent event

In

July 2020,

due to the facts that

Shenzhen City Mingshan Network Technology Co., Ltd. (“Shenzhen Mingshan”) and ChinaNet Chuang Tou (Shenzhen) Co., Ltd. (“ChinaNet Chuang Tou”) had become dormant since

2015

and

2018,

respectively,

as approved by all the respective shareholders of

these

two

entities, ChinaNet Chuang Tou and Shenzhen Mingshan were officially closed and deregistered with the competent local authorities. The Company used to own a

19%

and a

23.18%

equity interest in ChinaNet Chuang Tou and Shenzhen Mingshan, respectively. The Company's investments in these entities had been fully impaired in previous years before the deregistration.

On

August 11 2020,

under its

2015

Omnibus Securities and Incentive Plan, the Company granted and issued

0.05

million fully-vested and nonforfeitable shares of the Company's restricted common stock in exchange for a

12

-month technical consulting and advisory service commencing from such date. These shares were valued at the closing bid price of the Company's common stock on the date of grant, which was

US$1.36

per share. Total compensation expenses related to these shares was approximately

US$0.07

million. 

The Company primarily conducts its operations in the PRC. In

January 2020,

an outbreak of a novel coronavirus (COVID-

19

) surfaced in Wuhan City, Hubei province of the PRC, and spread all over the country during the

first

fiscal quarter of

2020.

The outbreak caused the Chinese government to require businesses to close, people to quarantine, and also to restrict certain travel within the country. The spread of COVID-

19

has resulted in the World Health Organization declaring the outbreak of COVID-

19

as a global pandemic. In cooperation with the government authorities, the Company's operating offices (especially that in Xiaogan City, Hubei province) were shut down for approximately

one

to

two

months after the Chinese New Year Holiday and were unable to reopen until mid-

March

or early-

April

in

2020.

The Company's principle business activity is to provide online advertising and marketing services to small and medium enterprises in the PRC, which is particularly sensitive to changes in general economic conditions. The pandemic of COVID-

19

in the PRC had caused decreases in or delays in advertising spending and had negatively impacted the Company's short-term ability to grow revenues. While the COVID-

19

pandemic is still in developing stages worldwide, international stock markets have begun to reflect the uncertainty associated with the slow-down in the global economy and the reduced levels of international travel experienced since the beginning of

January,

large declines in oil prices and the significant decline in the Dow Industrial Average at the end of

February

and beginning of

March 2020

was largely attributed to the effects of COVID-

19.

Although the Chinese government have declared the COVID-

19

outbreak largely under control within its border, the Company will continue to assess its financial impacts for the remainder of the year. There can be

no

assurance that this assessment will enable the Company to avoid part or all of any impact from the spread of COVID-

19

or its consequences, including downturns in business sentiment generally or in the Company's sector in particular.