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Note 11 - Blockchain Platform Applications Development Costs
12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Research, Development, and Computer Software Disclosure [Text Block]

11.

Blockchain platform applications development costs

 

In 2018, the Company entered into technical development contracts with two unrelated entities for the development of its blockchain technology-based platform applications with a contract amount of US$4.50 million and RMB3.0 million (approximately US$0.47 million), respectively. These two applications are named OMG and Bo!News, respectively. As of December 31, 2021, the Company had completed the development and integration of the Bo!News application, which provides a digitalized franchise management system for the SMEs. However, due to the repeated regional COVID-19 rebound cases in many provinces in the PRC after the severe COVID-19 pandemic in the first fiscal quarter of 2020, temporary quarantine and business shutdown incurred and is expected to continue incur from time to time, which resulted in pandemic fears and in return severally affected the SMEs owners’ confidence in the expansion of branded offline stores. As a result, the Company decided to suspend its launch of the OMG application, which is primarily developed for the use of small and medium brand stores’ reward/loyal points exchange. Alternatively, the Company enhanced the development of the blockchain infrastructure platform, i.e., Blockchain Integrated Framework (“BIF”) platform under the OMG development contract for retail business, which platform have membership management, trusted and decentralized payment management and Non-Fungible Token (“NFT”) management etc. features, so that the BIF platform can be further integrated into other blockchain application scenarios to provide data storage, assurance and analysis services to the SMEs.

 

Total development costs incurred for the BIF platform and the Bo!News application of approximately US$4.04 million and US$0.38 million, respectively, were both recognized as the Company's intangible assets as of December 31, 2021. The unpaid contract amounts of approximately US$0.56 million in the aggregate was waived as agreed by all parties.