Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions [Abstract]

Related Party Transactions

8.            Related Party Transactions

Shandong Media

Loan Receivable (WE ARE RESERVING – STILL NEED TO DISCLOSE?)

During the year ended December 31, 2011, the Company's loan receivable from Music Magazine increased approximately $12,000, due to currency fluctuations.  At December 31, 2011 and December 31, 2010, approximately $317,000 and $305,000, respectively, is due the Company from Music Magazine.  The Company advanced funds in the form of a loan to Music Magazine to fund its operations.  The loan is unsecured, interest-free and is due on December 31, 2012.  Music Magazine is an affiliate of Modern Movie & TV Biweekly Press, our partner in our Shandong Media joint venture company.

Prepaid Expense

As of December 31, 2011, Shandong Media prepaid $193,000 to Modern Movie for rental of space for company functions.

Amounts due from Shareholders (WE ARE RESERVING – STILL NEED TO DISCLOSE?)

As of December 31, 2011 and December 31, 2010, amounts due from shareholders include approximately $415,000 and $184,000, respectively, advanced to both Shandong Broadcast and to Modern Movie.  All of the parties are our partners in our Shandong Media joint venture company.  The amount due of approximately $103,000 and $95,000 at December 31, 2011 and December 31, 2010, respectively, from Shandong Broadcast is unsecured, interest free and has no fixed repayment terms.  The amount due of approximately $312,000 and $89,000 at December 31, 2011 and December 31, 2010, respectively, from Modern Movie is unsecured, interest free and is due on December 31, 2012.

Other Payable

As of December 31, 2011, Shandong Media has an other payable of approximately $113,000 related to a vehicle usage agreement with Shandong Broadcast & TV Weekly Press, our partner in our Shandong Media joint venture.

Jinan Broadband

Payable to Jinan Parent

During the year ended December 31, 2011, our payable to Jinan Parent increased approximately $5,000, due to currency fluctuations.  At December 31, 2011 and December 31, 2010, approximately $143,000 and $138,000, respectively, remained due to Jinan Parent.  This amount represents the remaining balance due from the initial acquisition which is unsecured, interest free and has no fixed repayment terms.

Revenue

During the year ended December 31, 2011, Jinan Broadband generated $185,000 of value-added service revenue from an affiliate, Jinan Radio and Television Networks Center (“Networks Center”).  Jinan Networks Center is the owner of Jinan Guangdian Jiahe Digital Television Co., Ltd. (“Jinan Parent”), our partner in our Jinan joint venture company, Jinan Broadband.  Jinan Parent has a 49% ownership interest in Jinan Broadband.

General and Administrative Expense

During the twelve months ended December 31, 2011, Jinan Broadband incurred service fees to Networks Center of approximately $63,000.  To minimize administrative fees and maintain a low headcount at Jinan Broadband, Networks Center collects customer payments on behalf of Jinan Broadband and then remits the funds to Jinan Broadband.  Networks Center charges Jinan Broadband a 2% service fee on the payments collected.

Accounts Payable

As of December 31, 2011, Jinan Broadband had accounts payable to Networks Center of approximately $268,000 relating to maintenance, network leasing and facility rental fees.  Jinan Broadband's operation is located in a building that is owned by Networks Center.  As such, Jinan Broadband shares the cable network usage with Networks Center.  Additionally, Jinan Broadband utilizes Networks Center's staff to provide cable network maintenance support to their customers.  As such Network Center charges Jinan Broadband fees for these services and usage of their facility.

Amount due from Non-controlling Interest

Subsequent to our acquisition of Sinotop in July 2010, Sinotop and Hua Cheng entered into a variable interest entity agreement to form and operate Zhong Hai Video with equity ownership interests of 80% and 20%, respectively, on total registered capital of RMB 50 million.  Sinotop has contributed RMB 10 million and has a commitment to fund the remaining RMB 30 million.  As of December 31, 2011, Hua Cheng has not made its capital contribution of RMB 10 million.  Accordingly, we recorded an amount due from non-controlling interest in the amount of $1,572,699.

Receivable from Trustee

At the time we acquired Sinotop Hong Kong, one of the bank accounts acquired was in Zhang Yan's name, our PRC trustee in the VIE agreements.  At December 31, 2010 this account remained open with a $172,000 balance and the amount was reported in other current assets in the consolidated balance sheet at December 31, 2010.  During the first quarter of 2011, the account was settled in full.

Other Revenue

During the quarter ended December 31, 2011, Zhong Hai Video, our 80% owned subsidiary, provided to Hua Cheng Film and Television Digital Program Co., Ltd. (“CHC”) consulting services for consideration of $23,000.  The Company recognized this amount as other revenue.  CHC is the 51% owner of Hua Cheng which in turns holds 20% ownership in Zhong Hai Video. In addition, our subsidiary, Sinotop Beijing holds 39% ownership in Hua Cheng and 80% ownership in Zhong Hai Video.