UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
______________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): May 17, 2010
CHINANET ONLINE HOLDINGS,
INC.
(Exact
Name of Registrant as Specified in Charter)
|
Nevada
|
000-52672
|
20-4672080
|
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
No.3
Min Zhuang Road, Building 6,
Yu
Quan Hui Gu Tuspark, Haidian District, Beijing, PRC
100195
|
|
(Address
of Principal Executive Offices and Zip
Code)
|
Registrant’s
telephone number, including area code: 011-86-51600828
__________________________________________
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition.
On May
17, 2010, ChinaNet Online Holdings, Inc., a Nevada corporation, issued a press
release containing certain financial results for its first fiscal quarter of
2010. A copy of the press release is attached to this Current Report
on Form 8-K as Exhibit 99.1.
As
provided in General Instruction B.2 of SEC Form 8-K, such information shall not
be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities
of that section, and it shall not be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, or under the Exchange Act,
whether made before or after the date hereof, except as expressly set forth by
specific reference in such filing to this Current Report on Form
8-K.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits:
|
No.
|
Description
|
|
99.1
|
Press
Release dated May 17, 2010
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
Dated: May
17, 2010
|
CHINANET
ONLINE HOLDINGS, INC.
|
|
|
By:
|
/s/ Zhige Zhang
|
|
|
Name:
Zhige Zhang
|
||
|
Title:
Chief Financial
Officer
|
||
Exhibit
Index
|
No.
|
Description
|
|
99.1
|
Press
Release dated May 17, 2010
|
Exhibit 99.1
ChinaNet
Online Holdings, Inc. Reports First Quarter 2010 Financial Results
Beijing, China, May 17, 2010 —
ChinaNet Online Holdings, Inc. (“ChinaNet”, NYSE Amex: CNET), a leading
full-service media development, advertising and communications company for small
and medium-sized enterprises (SMEs) in the People's Republic of China ("China"),
today announced its first quarter 2010 financial results.
|
|
§
|
First
quarter 2010 adjusted net income increased
51.2% to $1.9 million, with adjusted earnings per share of $0.09, as
revenues increased 4.4% to $10.0 million with operating margins of 21.0%
vs. 16.9%
|
|
|
§
|
Company
launches new growth initiatives
|
|
|
§
|
Company
reaffirmed 2010 revenue guidance of $45.0 million and adjusted net income
guidance of $14.1 million, representing 19.0% and 67.9% growth over 2009
revenue and adjusted net income,
respectively
|
|
|
§
|
Management
to host earnings conference call May 18 at 10:30 a.m.
ET
|
SUMMARY
FINANCIALS
|
First
Quarter 2010 Results (USD) (unaudited)
|
||||||||||||
|
(three
months ended March 31)
|
Q1
2010
|
Q1
2009
|
CHANGE
|
|||||||||
|
Sales
|
$ | 10.2 million | $ | 9.8 million | +4.4 | % | ||||||
|
Gross
Profit
|
$ | 3.5 million | $ | 3.5 million | — | |||||||
|
Adjusted
Net Income
|
$ | 1.9 million | $ | 1.3 million | +51.2 | % | ||||||
|
GAAP
Net Income
|
$ | 3.8 million |
(1)
|
$ | 1.3 million | +196.7 | % | |||||
|
Adjusted
EPS (Diluted)
|
$ | 0.09 | $ | 0.09 | — | |||||||
|
GAAP
EPS (Diluted)
|
$ | 0.18 |
(1)
|
$ | 0.09 | +100.0 | % | |||||
|
Weighted
Shares Outstanding
|
21.1 million | 13.8 million | 52.9 | % | ||||||||
(1) GAAP
net income and GAAP EPS (Diluted) for
Q1 2010 include a $1.9 million
non-cash gain related to changes in fair value of warrants.
1
First Quarter
2010 Financial Results
Revenues
for the first quarter of 2010 increased 4.4% to $10.2 million compared to $9.8
million for the first quarter of 2009. In concert with management’s
plan for 2010, Internet advertising increased 23.3% year-over-year to $4.5
million, and comprised 44.4% of total revenue. Growth was driven by high
customer retention and new customer acquisition generated through the successful
brand building efforts for www.28.com in prior
years both on TV and through other well-known portal websites in China. Revenues
generated by TV advertising during the first quarter of 2010 decreased 6.3%
year-over-year to approximately $5.4 million or 58.6% of total revenues.
As of
March 31, 2010, the number of active customers for the Company’s Internet
advertising business was 700 and the number of customers being serviced by its
TV advertising business was 200. Approximately 10% of customers were being
serviced by both platforms.
Cost of
sales for the three months ended March 31, 2010 was approximately $6.7 million
or 65.8% of revenues as compared to $6.3 million or 64.1% of revenues for the
three months ended March 31, 2009. The costs associated with the Company’s
advertising services include costs for purchasing Internet advertising resources
from other well-known portal websites in China and purchasing Television
advertisement time from well known stations.
For the
first quarter of 2010 gross profit was $3.5 million, representing
gross margin of 34.2%, compared to $3.5 million in gross profit and a gross
margin of 35.9% in the first quarter of 2009. ChinaNet’s Internet advertising
business generated gross profit margin of 75.0% and 77.0% in the first quarter
of 2010 and 2009, respectively, while the Company’s TV advertisement segment
generated a gross profit margin of -2% and 12.0% in each respective quarter. The
decrease was mainly due to the much higher cost of TV air time compared with the
better price performance ratio generated from Internet advertisement. In
addition, the Spring Festival in the middle of the first quarter of 2010 reduced
customer demand for air time and required the Company to maintain the same
selling price as last year to attract clients.
Operating
expenses for the three months ended March 31, 2010 were approximately $1.4
million, down 27.2% from $1.9 million in the same period of 2009. Selling
expenses for the period were $0.4 million, a decrease of $1.1 million from the
first quarter of 2009. The decrease was due to a reduction in TV based brand
development advertising expenses given the past success in establishing market
recognition and awareness for the Company’s website www.28.com. General
and administrative expenses were $0.8 million and $0.3 million in the first
quarter 2010 and 2009, respectively, with the increase primarily due to
non-recurring expenses associated with US public company reporting and non-cash
equity compensation for services.
Operating
income for the first quarter of 2010 totaled approximately $2.1 million, a
29.4% increase from the $1.7 million reported for the first quarter of
2009. Operating margins were 21.0% and 16.9% for the first quarter of 2010 and
2009, respectively.
2
GAAP net
income for the first quarter was $3.8 million, an increase of 196.7%
compared to $1.3 million reported in the same period of the prior year,
with corresponding fully diluted net income per share of $0.18 in the first
quarter of 2010 compared to fully diluted net income per share of $0.09 in the
same period in 2009, based on 21.1 million and 13.8 million outstanding shares,
respectively. During
the first quarter of 2010 the Company realized a non-cash gain of $1.9
million for changes in fair value of warrants. Adjusting for the non-cash gain,
net income for the first quarter of 2010 was $1.9 million, an increase of 51.2%
over the first quarter of 2009, with $0.09 in earnings per diluted
share.
“We are
pleased with the continued growth in our Internet advertising business, which
showed measured gains in revenue, number of customers and market share," stated
Mr. Handong Cheng, Chairman and CEO of the Company. “With over 20% annual growth
projected for the Chinese Internet advertising market through 2010 fueled by a
sharp trajectory in franchise and chain store enterprises, we believe ChinaNet’s
“fully integrated one-stop shop” advertising exchange is well positioned to
capitalize on this large secular growth opportunity and further increase market
share. During the quarter we added notable customers operating franchise
businesses including EuroHome, Shanghai Baidian Marketing Co., Ltd, Beijing
Zhongke Advertising Co., Ltd. who are engaged in Home
goods, Children toy and electronic industry, respectively. As previously
disclosed, management believes company resources are better focused on our core
business which generates recurring and predictable, high margin revenue. In
addition, we are focused on introducing and expanding an exchange platform to
enable manufacturers to add field representatives in various geographic areas
while rolling out kiosks in both China Construction and Shanghai Rural
Commercial Bank. We were also pleased that we commenced trading on the NYSE Amex
during the quarter, a positive development for the Company and our shareholders
that demonstrates the progress and performance achieved by ChinaNet.”
Balance
Sheet and Cash Flow
The
Company had $12.4 million in cash and equivalents on March 31, 2010, compared to
$13.9 million on December 31, 2009, working capital of $21.3 million, compared
to $19.4 million, and a current ratio of 6.0 to 1 compared 4.9 to 1 on December
31, 2009. Accounts receivable were $4.2 million on March 31, 2010, up from to
$3.2 million on December 31, 2009, with DSO’s of 33 days compared to 20 days.
For the first three months of 2010, the Company generated $0.3 million in cash
from operations versus $1.5 million for the same period in 2009, with the
variance principally resulting from an increase in deposits and prepayments paid
to TV stations.
Guidance
for 2010
Management
reaffirmed 2010 revenue guidance of $45 million and net income guidance of $14.1
million, which represents 19% and 67.9% year-over-year growth,
respectively.
3
Business
Outlook
ChinaNet
plans to focus on strategically expanding its rapidly growing Internet
advertising sales business, which boasts gross margins of 75%, compared to 15%
for its TV Advertising business segment, and yields substantial recurring
revenue. There are several fundamental factors which we believe will drive the
Company’s business, including an overall increase in consumer demand for goods
and services in China as evidenced by a year-on-year growth in total retail
sales of consumer goods of 18.1 percent in the first four months of 2010,
supported by government initiatives for developing small and medium companies,
which creates millions of jobs and are a critical component of the economy.
According to the 2008 China Franchise Development Report by China Chain Store
& Franchise Development Report, the Chinese Small and Medium Enterprises
(SMEs) marketplace is forecasted to grow to almost $43 billion next year,
representing a two-year compounded average growth rate of over 21%. There were
approximately 3,000 franchise enterprises and 260,000 chain stores in China at
the end of 2007, which are projected to total 4,000 and 320,000 respectively
during this year.
Internet Advertising - During
the first quarter of 2010, the Company’s www.28.com web portal exchange further
increased its market share from 35% to 30% due to successful branding and
marketing efforts by the Company’s sales team, in addition to a growing and
stable customer base. The Company plans to continue to add new modules into its
28.com network including a new advertisement section mainly for local Chinese
famous branding manufacturers to help them to enhance its brand building through
our website, which will provide a more robust platform and incremental revenue
potential. ChinaNet has been highly successful in past branding programs,
including the use of TV advertising. As prices for this medium increase and
28.com becomes entrenched as a leading industry player, the Company plans to
actively participate in government supported programs focused on raising
employment rates which it believes will drive meaningful new customer
adoption.
ChinaNet TV - The Company
continues to be a leading producer and distributor of web-based video ads and TV
infomercials for start-ups and entrepreneurs. Shows are distributed over airtime
purchased from the largest national satellite TV stations. Customers pay
ChinaNet TV for proprietary editorial coverage and advertising spots. Currently
200 customers utilize this service in addition to 28.com.
During
the first quarter of 2010 the Company sold about 7,500 minutes of
advertising time that it purchased from seven provincial TV stations compared
with approximately 8,000 minutes in the same period of 2009. The
decrease was mainly due to the much higher cost of TV air time compared with the
better price performance ratio generated from Internet advertisement. In
addition, the Spring Festival in the middle of the first quarter of 2010 reduced
customer demand for air time and required the Company to maintain the same
selling price as last year to attract clients. As previously reported, in its
effort to more effectively allocate working capital and expand margins, the
Company will be committing less capital to this business segment, by reducing
estimated total show time from 100,000 to 35,000 minutes in 2010.
4
Bank Kiosks - During the first
quarter of 2010, ChinaNet’s bank kiosk advertising business, which provides
online access for customers while displaying advertising for both PRC and global
based companies through an exclusive arrangement with the China Construction
Bank (CCB), reported $0.1 million in revenues. As of March 31, 2010, the Company
has deployed 200 kiosks in China Construction Bank Henan Branch. ChinaNet plans
to deploy 1300 more kiosks in aggregate by the end of 2010 starting from Henan,
Shanghai and plans to cover Beijing, Guangdong and Si Chuan based on the
possible client sources it will target. Management estimates a
payback of one and half years for all equipment deployed, with higher margins
and recurring advertising revenue. ChinaNet expects that its multi-platform
advertising network will drive further growth during 2010.
Conference
Call
The
conference call will take place at 10:30 a.m. ET on Tuesday, May 18, 2010.
Interested participants should call 1-877-941-4775 when calling within the
United States or 1-480-629-9763 when calling internationally.
A
playback will be available through May 25, 2010. To listen, please call
1-800-406-7325 within the United States or 1-303-590-3030 when calling
internationally. Utilize the pass code 4302503 for the replay.
This call
is being webcast by ViaVid Broadcasting and can be accessed by clicking on this
link http://viavid.net/dce.aspx?sid=00007587,
or visiting ViaVid's website at www.viavid.net, where
the webcast can be accessed through May 25, 2010.
About
ChinaNet Online Holdings, Inc.
The
Company, a parent company of ChinaNet Online Media Group Ltd., incorporated in
the BVI ("ChinaNet" or "Zhong Wang Zai Xian"), is a leading full-service media
development, advertising and communications company for small and medium
companies (SME) in China. The Company, through its certain contractual
arrangements with operating companies in the PRC, provides Internet advertising
and other services for Chinese SMEs via its portal website 28.com, TV
commercials and program production via China-Net TV, and in-house LCD
advertising on banking kiosks targeting Chinese banking patrons.
Website: http://www.chinanet-online.com .
5
Safe
Harbor
This
release contains certain "forward-looking statements" relating to the business
of ChinaNet Online Holdings, Inc., which can be identified by the use of
forward-looking terminology such as "believes," "expects," "anticipates,"
"estimates" or similar expressions. Such forward-looking statements involve
known and unknown risks and uncertainties, including business uncertainties
relating to government regulation of our industry, market demand, reliance on
key personnel, future capital requirements, competition in general and other
factors that may cause actual results to be materially different from those
described herein as anticipated, believed, estimated or expected. Certain of
these risks and uncertainties are or will be described in greater detail in our
filings with the Securities and Exchange Commission. These forward-looking
statements are based on ChinaNet's current expectations and beliefs concerning
future developments and their potential effects on the company. There can be no
assurance that future developments affecting ChinaNet will be those anticipated
by ChinaNet. These forward-looking statements involve a number of risks,
uncertainties (some of which are beyond the control of the Company) or other
assumptions that may cause actual results or performance to be materially
different from those expressed or implied by such forward-looking statements.
ChinaNet undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required under applicable securities
laws.
About
Non-GAAP Financial Measures
To
supplement our consolidated financial statements, which statements are prepared
and presented in accordance with GAAP, we use the following non-GAAP financial
measures: adjusted net income and adjusted EPS (basic and diluted). The
presentation of this financial information is not intended to be considered in
isolation or as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP. We use these non-GAAP financial
measures for financial and operational decision making and as a means to
evaluate period-to-period comparisons. Our management believes that these
non-GAAP financial measures provide meaningful supplemental information
regarding our performance by excluding certain items that may not be indicative
of our “recurring core business operating results.” We believe that
both management and investors benefit from referring to these non-GAAP financial
measures in assessing our performance and when planning, forecasting and
analyzing future periods. We believe these non-GAAP financial measures are
useful to investors both because (1) they allow for greater transparency with
respect to key metrics used by management in its financial and operational
decision making and (2) they are used by our institutional investors and the
analyst community to help them analyze the health of our business.
6
The
following table provides the non-GAAP financial measure and the related GAAP
measure and provides a reconciliation of the non-GAAP measure to the equivalent
GAAP measure.
|
Q1
2010
|
Q1
2009
|
|||||||
|
GAAP
Net Income
|
$ | 3,795,000 | $ | 1,279,000 | ||||
|
Change
in fair value of warrants
|
$ | (1,861,000 | ) | — | ||||
|
Adjusted
Net Income
|
$ | 1,934,000 | $ | 1,279,000 | ||||
|
Adjusted
EPS (Diluted)
|
$ | 0.09 | $ | 0.09 |
For
further information, contact:
HC
International, Inc.
Ted
Haberfield, Executive VP
Tel:
+1-760-755-2716
Email:
thaberfield@hcinternational.net
- Financial Tables Follow
- -
7
CHINANET
ONLINE HOLDINGS, INC.
CONSOLIDATED
BALANCE SHEETS
(In
thousands, except for number of shares and per share data)
|
March 31,
|
December
31,
|
|||||||
|
2010
|
2009
|
|||||||
|
(US $)
|
(US $)
|
|||||||
|
Unaudited
|
||||||||
|
Assets
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 12,395 | $ | 13,917 | ||||
|
Accounts
receivable, net
|
4,235 | 3,173 | ||||||
|
Other
receivables
|
2,120 | 2,636 | ||||||
|
Prepayments
and deposits to suppliers
|
5,882 | 4,111 | ||||||
|
Due
from related parties
|
161 | 492 | ||||||
|
Due
from director
|
219 | - | ||||||
|
Inventories
|
2 | 2 | ||||||
|
Other
current assets
|
460 | 30 | ||||||
|
Total
current assets
|
25,474 | 24,361 | ||||||
|
Property
and equipment, net
|
1,307 | 1,355 | ||||||
|
Other
long-term assets
|
35 | 48 | ||||||
| $ | 26,816 | $ | 25,764 | |||||
|
Liabilities
and Stockholders’ Equity
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 500 | $ | 290 | ||||
|
Advances
from customers
|
428 | 914 | ||||||
|
Other
payables
|
11 | 27 | ||||||
|
Accrued
payroll and other accruals
|
266 | 191 | ||||||
|
Due
to related parties
|
- | 24 | ||||||
|
Due
to Control Group
|
1,139 | 1,142 | ||||||
|
Due
to director
|
282 | - | ||||||
|
Taxes
payable
|
1,277 | 1,978 | ||||||
|
Dividends
payable
|
317 | 373 | ||||||
|
Total
current liabilities
|
4,220 | 4,939 | ||||||
|
Long-term
borrowing from director
|
128 | 128 | ||||||
|
Warrant
liabilities
|
- | 9,564 | ||||||
|
Commitments
and contingencies
|
- | - | ||||||
|
Stockholders’
equity:
|
||||||||
|
Series
A convertible preferred stock, US$0.001 par value;
authorized-8,000,000 shares; issued and outstanding-3,403,600
and 4,121,600 shares at March 31, 2010 and December 31, 2009 respectively
(Liquidation preference of $2.5 per share)
|
3 | 4 | ||||||
|
Common
stock, US$0.001 par value; authorized-50,000,000 shares; issued and
outstanding 16,546,320 shares and 15,828,320 shares at March
31, 2010 and December 31, 2009 respectively
|
17 | 16 | ||||||
|
Additional
paid-in capital
|
18,340 | 10,574 | ||||||
|
Statutory
reserves
|
372 | 372 | ||||||
|
Retained
earnings
|
3,616 | 50 | ||||||
|
Accumulated
other comprehensive income
|
120 | 117 | ||||||
|
Total
stockholders’ equity
|
22,468 | 11,133 | ||||||
| $ | 26,816 | $ | 25,764 | |||||
8
CHINANET ONLINE HOLDINGS,
INC.
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In
thousands, except for number of shares and per share data)
|
Three Months Ended March
31,
|
||||||||
|
2010
|
2009
|
|||||||
|
(US $)
|
(US $)
|
|||||||
|
Unaudited
|
Unaudited
|
|||||||
|
Sales
|
||||||||
|
To
unrelated parties
|
$ | 10,034 | $ | 9,303 | ||||
|
To
related parties
|
194 | 494 | ||||||
| 10,228 | 9,797 | |||||||
|
Cost
of sales
|
6,727 | 6,277 | ||||||
|
Gross
margin
|
3,501 | 3,520 | ||||||
|
Operating
expenses
|
||||||||
|
Selling expenses
|
427 | 1,462 | ||||||
|
General and administrative expenses
|
794 | 349 | ||||||
|
Research and development expenses
|
134 | 50 | ||||||
| 1,355 | 1,861 | |||||||
|
Income from
operations
|
2,146 | 1,659 | ||||||
|
Other
income (expense):
|
||||||||
|
Changes in fair value of warrants
|
1,861 | - | ||||||
|
Interest income
|
2 | 2 | ||||||
|
Other income
|
- | 4 | ||||||
| 1,863 | 6 | |||||||
|
Income
before income tax expense
|
4,009 | 1,665 | ||||||
|
Income tax expense
|
214 | 386 | ||||||
|
Net
income
|
3,795 | 1,279 | ||||||
|
Other
comprehensive income
|
||||||||
|
Foreign
currency translation gain
|
3 | 3 | ||||||
|
Comprehensive
income
|
$ | 3,798 | $ | 1,282 | ||||
|
Net
income
|
$ | 3,795 | $ | 1,279 | ||||
|
Dividend
of Series A convertible preferred stock
|
(229 | ) | - | |||||
|
Net
income attributable to common shareholders
|
$ | 3,566 | $ | 1,279 | ||||
|
Earnings
per share
|
||||||||
|
Earnings
per common share
|
||||||||
|
Basic
|
$ | 0.22 | $ | 0.09 | ||||
|
Diluted
|
$ | 0.18 | $ | 0.09 | ||||
|
Weighted
average number of common shares outstanding:
|
||||||||
|
Basic
|
16,234,409 | 13,790,800 | ||||||
|
Diluted
|
21,059,683 | 13,790,800 | ||||||
9
CHINANET
ONLINE HOLDINGS, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
|
Three Months Ended March
31,
|
||||||||
|
2010
|
2009
|
|||||||
|
(US $)
|
(US $)
|
|||||||
|
Unaudited
|
Unaudited
|
|||||||
|
Cash
flows from operating activities
|
||||||||
|
Net
income
|
$ | 3,795 | $ | 1,279 | ||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||
|
Depreciation
and Amortization
|
92 | 42 | ||||||
|
Share-based
compensation expenses
|
63 | - | ||||||
|
Changes
in fair value of warrants
|
(1861 | ) | - | |||||
|
Changes
in operating assets and liabilities
|
||||||||
|
Accounts
receivable
|
(1062 | ) | (369 | ) | ||||
|
Other
receivables
|
1979
|
(63 | ) | |||||
|
Prepayments
and deposits to suppliers
|
(1770 | ) | (374 | ) | ||||
|
Due
from related parties
|
331 | 45 | ||||||
|
Due
from/to director
|
63 | - | ||||||
|
Other
current assets
|
(430 | ) | 11 | |||||
|
Accounts
payable
|
212 | 86 | ||||||
|
Advances
from customers
|
(486 | ) | 496 | |||||
|
Accrued
payroll and other accruals
|
75 | 77 | ||||||
|
Other
payables
|
(16 | ) | - | |||||
|
Due
to related parties
|
(24 | ) | (13 | ) | ||||
|
Due
to Control Group
|
(4 | ) | (256 | ) | ||||
|
Taxes
payable
|
(701 | ) | 532 | |||||
|
Net
cash provided by operating activities
|
256 | 1493 | ||||||
|
Cash
flows from investing activities
|
||||||||
|
Purchases
of vehicles and office equipment
|
(31 | ) | (19 | ) | ||||
|
Purchases
of other long-term assets
|
- | (15 | ) | |||||
|
Net
cash used in investing activities
|
(31 | ) | (34 | ) | ||||
|
Cash
flows from financing activities
|
||||||||
|
Dividend
paid to convertible preferred stockholders
|
(285 | ) | - | |||||
|
Increase
of short-term loan to third parties
|
(1463 | ) | (1461 | ) | ||||
|
Decrease
in short-term loan from directors
|
- | (10 | ) | |||||
|
Increase
in other payables
|
- | 14 | ||||||
|
Net
cash provided by financing activities
|
(1,748 | ) | (1,457 | ) | ||||
|
Effect
of exchange rate fluctuation on cash and cash
equivalents
|
1 | 4 | ||||||
|
Net
increase in cash and cash equivalents
|
(1,522 | ) | 6 | |||||
|
Cash
and cash equivalents at beginning of year
|
13,917 | 2,679 | ||||||
|
Cash
and cash equivalents at end of year
|
$ | 12,395 | $ | 2,685 | ||||
|
Supplemental
disclosure of cash flow information
|
||||||||
|
Interest
paid
|
$ | - | $ | - | ||||
|
Income
taxes paid
|
$ | 1,019 | $ | 4 | ||||
|
Non-cash
transactions:
|
||||||||
|
Warrant
liability reclassify to additional paid in capital
|
$ | 7,703 | $ | - | ||||
10