Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Basis of Accounting, Policy [Policy Text Block]

a)	Basis of presentation

The unaudited condensed consolidated interim financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The unaudited condensed consolidated interim financial information as of

June 30, 2019

and for the

six

and

three

months ended

June 30, 2019

and

2018

have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in complete consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited condensed consolidated interim financial information should be read in conjunction with the financial statements and the notes thereto, included in the Company’s Annual Report on Form

-K for the year ended

December 31, 2018,

previously filed with the SEC (the

“2018

Form

-K”) on

April 15, 2019.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s condensed consolidated financial position as of

June 30, 2019,

its condensed consolidated results of operations for the

six

and

three

months ended

June 30, 2019

and

2018,

and its condensed consolidated cash flows for the

six

months ended

June 30, 2019

and

2018,

as applicable, have been made. The interim results of operations are

not

necessarily indicative of the operating results for the full fiscal year or any future periods.

Liquidity and Management’s Plan, Policy [Policy Text Block]

Liquidity and management’s plan

The Company incurred operating losses and had negative operating cash flows and

may

continue to incur operating losses and generate negative cash flows as the Company implements its future business plan. The Company’s net loss attributable to stockholders for the

six

and

three

months ended

June 30, 2019

was approximately

US$1.52

million and

US$0.38

million, respectively, compared with approximately

US$10.07

million and

US$9.50

million for the

six

and

three

months ended

June 30, 2018,

respectively. As of

June 30, 2019,

the Company had cash and cash equivalents of approximately

US$1.40

million and net cash used in operating activities during the

six

months ended

June 30, 2019

was approximately

US$2.33

million.

August 7, 2019,

the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with selected investors (the “Investors”) related to the purchase and sale of the Company’s common stock (the “Shares”). The Company has agreed to issue an aggregate of

3,216,860

Shares in consideration for approximately

$4.8

million. Each Share was sold to the Investors at

$1.4927

per Share. The private placement was conducted pursuant to Section

(

) of the Securities Act of

1933,

as amended, and Regulation S promulgated thereunder (the “PIPE transaction”). Although the PIPE transaction has

not

been closed as of the date hereof, the Company determined it is probable that the PIPE transaction will be closed within the assessment period.

Consolidation, Policy [Policy Text Block]

Principles of consolidation

The unaudited condensed consolidated interim financial statements include the accounts of all the subsidiaries and VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of these consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company continually evaluates these estimates and assumptions based on the most recently available information, historical experience and various other assumptions that the Company believes to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign currency translation

The exchange rates used to translate amounts in RMB into US$ for the purposes of preparing the condensed consolidated financial statements are as follows:

	June 30, 2019		December 31, 2018

Balance sheet items, except for equity accounts		6.8747		6.8632

	Six Months Ended June 30,
	2019		2018

Items in the statements of operations and comprehensive loss, and statements of cash flows		6.7808		6.3711

	Three Months Ended June 30,
	2019		2018

Items in the statements of operations and comprehensive loss		6.8137		6.3789

representation is made that the RMB amounts could have been, or could be converted into US$ at the above rates.

Fair Value Measurement, Policy [Policy Text Block]

Fair value measurement

Liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of

June 30, 2019

and

December 31, 2018

are as follows:

Fair value measurement at reporting date using

As of
June 30, 2019

Quoted Prices
in Active Markets
for Identical
Assets/Liabilities
(Level 1)

Significant
Other
Observable Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

US$(’000)

(Unaudited)

Warrant liabilities (Note 17)

135

Fair value measurement at reporting date using

As of
December 31, 2018

Quoted Prices
in Active Markets
for Identical
Assets/Liabilities
(Level 1)

Significant
Other
Observable Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

US$(’000)

Warrant liabilities (Note 17)

606

Revenue from Contract with Customer [Policy Text Block]

Revenue recognition

All of the Company’s revenues are generated from the PRC. The following tables present the Company’s revenues disaggregated by products and services and timing of revenue recognition:

	Six Months Ended June 30,				Three Months Ended June 30,
	2019		2018		2019		2018
	US$(’000)		US$(’000)		US$(’000)		US$(’000)
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)

Internet advertising and data service
--distribution of the right to use search engine marketing service		18,580		25,848		11,855		19,405
--online advertising placements		5,406		4,551		3,575		2,954
--sales of effective sales lead information		29		283		23		161
TV advertising service		-		91		-		-
Others		5		7		-		-
Total revenues	$	24,020	$	30,780	$	15,453	$	22,520

	Six Months Ended June 30,				Three Months Ended June 30,
	2019		2018		2019		2018
	US$(’000)		US$(’000)		US$(’000)		US$(’000)
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)

Revenue recognized over time		23,991		30,497		15,430		22,359
Revenue recognized at a point in time		29		283		23		161
Total revenues	$	24,020	$	30,780	$	15,453	$	22,520

Contract costs

For the

six

and

three

months ended

June 30, 2019

and

2018,

the Company did

not

have any significant incremental costs of obtaining contracts with customers incurred and/or costs incurred in fulfilling contracts with customers, that shall be recognized as an asset and amortized to expenses in a pattern that matches the timing of the revenue recognition of the related contract.

Contract liabilities

The table below summarized the movement of the Company’s contract liabilities for the

six

months ended

June 30, 2019:

	Contract liabilities
	US$(’000)

Balance as of January 1, 2019		1,061
Exchange translation adjustment		(2	)
Revenue recognized from beginning contract liability balances		(619	)
Advances received from customers related to unsatisfied performance obligations		2,381
Balance as of June 30, 2019 (Unaudited)		2,821
Including:
--advance from customers		2,768
--advance from a customer, related		53
Total contract liabilities as of June 30, 2019 (Unaudited)		2,821

Advance from customers related to unsatisfied performance obligations are generally refundable. Refund of advance from cu

stomers were insignifi

cant for the

six

and

three

months ended

June 30, 2019

and

2018.

For the

six

and

three

months ended

June 30, 2019

and

2018,

there is

revenue recognized from performance obligations that were satisfied in prior periods.

Transaction price allocated to remaining performance obligation

The Company has elected to apply the practical expedient in paragraph ASC Topic

606

and did

not

disclose the information related to transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of

June 30, 2019,

because all performance obligations of the Company’s contracts with customers have an original expected duration of

one

year or less.

Advertising Cost [Policy Text Block]

h)	Advertising expenses

Advertising costs for the Company’s own brand building are expensed when incurred and are included in “sales and marketing expenses” in the statements of operations and comprehensive loss.

advertising expenses for the Company’s own brand building was incurred for the

six

three

months ended

June 30, 2019.

For the

six

and

three

months ended

June 30, 2018,

advertising expenses for the Company’s own brand building were approximately

US$0.41

million and

US$0.02

million, respectively.

Research and Development Expense, Policy [Policy Text Block]

Research and development expenses

The Company accounts for expenses for the enhancement, maintenance and technical support to the Company’s Internet platforms and intellectual properties that are used in its daily operations in research and development expenses. Research and development costs are charged to expense when incurred. Expenses for research and development for the

six

months ended

June 30, 2019

and

2018

were approximately

US$0.36

million and

US$0.46

million, respectively. Expenses for research and development for the

three

months ended

June 30, 2019

and

2018

were approximately

US$0.16

million and

US$0.24

million, respectively.

Lessee, Leases [Policy Text Block]

Lease

January 1, 2019,

the Company adopted ASC Topic

842,

“Lease”, applying the optional transition method in accordance with ASU

No.

2018

11,

which permitted the Company to change its date of initial application to the beginning of the period of adoption of ASC Topic

842

(i.e.

January 1, 2019)

and recognize the effects of applying ASC Topic

842

as a cumulative-effect adjustment to retained earnings as of

January 1, 2019,

and remain applying ASC Topic

840

in the comparative periods. The adoption of ASC Topic

842

didn’t result in a material adjustment to the Company’s accumulated deficit as of

January 1, 2019.

The Company leases

two

offices in the PRC from unrelated

third

parties during its normal course of business, of which

one

office is used as the Company’s principle executive office in Beijing, the other is used as the Company’s office in Hubei. Other than these, the Company does

not

have any other contract that is or contains a lease under ASC Topic

842.

The Company’s lease contracts do

not

contain any option for the Company to extend or terminate the lease, and do

not

contain the option for the Company to purchase the underlying assets. Based on the noncancelable lease period in the contract, the Company considers contract-based, asset-based, market-based and entity-based factors to determine the term over which it is reasonably certain to extend the lease, and then determine the lease term of each contract, which is

years.

The Company’s lease contracts only contain fixed lease payments and do

not

contain any residual value guarantee. The lease payments of the Company’s Beijing office are required to be paid on a quarterly basis, and the lease payments of its Hubei office are required to be paid on an annual basis.

The Company’s office lease contracts do

not

contain any nonlease component and are classified as operating leases in accordance with ASC Topic

842

As the implicit rates of the Company leases cannot be readily determined, in accordance with ASC Topic

842

the Company uses its incremental borrowing rate as the discount rate to determine the present value of the lease payments for each lease contract. The discount rate used by the Company is

6%,

which is determined based on the interest rate commonly used by the commercial banks in the PRC for the

years long-term loan lent to business entities on a collateralized basis.

The Company’s

lease agreement of its previous executive office in Beijing expired on

March 31, 2019.

In mid-

August 2019,

the Company relocated to a new Beijing office leased from another unrelated

third

party. From

April 1, 2019

through the date of the relocation, the Company continued staying in its previous executive office in Beijing on a separately negotiated fixed daily rate as agreed by the Company and the lessor. Because the duration of this lease was less than

twelve

months, it met the definition of a short-term lease under ASC

842.

As a result, in accordance with ASC

842

as an accounting policy, the Company elected

not

to apply the recognition requirements in this Subtopic (i.e.

not

to recognize right-of-use asset and related lease liability) to this short-term lease. Instead, the Company recognized the lease payments of this short-term lease in its consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term. For the

three

months ended

June 30, 2019,

short-term lease cost recognized under ASC

842

was approximately

US$0.13

million. As of

June 30, 2019,

unpaid lease payments related to this short-term lease was approximately

US$0.12

million.

As of

June 30, 2019,

operating lease right-of-use assets recognized by the Company was approximately

US$17

thousand, operating lease liabilities recognized was approximately

US$10

thousand, which was included in the Company’s other current liabilities.

For the

six

and

three

months ended

June 30, 2019,

total operating lease cost recognized under ASC Topic

842

was approximately

US$88

thousand and

US$3

thousand, respectively. For the

six

and

three

months ended

June 30, 2018,

operating lease cost recognized under ASC Topic

840

was approximately

US$0.18

million and

US$0.09

million, respectively.

As of

June 30, 2019,

the Company’s total undiscounted lease payments of approximately

US$10

thousand approximate its total operating lease liabilities recognized

due to their short maturities. The Company’s lease payments as of

June 30, 2019

will mature for the year ending

December 31, 2020.

Supplemental information related to operating leases

Operating cash flows used for operating leases (in thousands of U.S. dollars)	93
Right-of-use assets obtained in exchange for new lease liabilities (in thousands of U.S. dollars)	10
Weighted-average remaining lease term (years)	1.71
Weighted-average discount rate	6	%

New Accounting Pronouncements, Policy [Policy Text Block]

Impact of recently issued accounting pronouncements

June 2016,

the FASB issued ASU

No.

2016

13,

“Financial Instruments-Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments”. The amendments in this ASU require the measurement and recognition of expected credit losses for financial assets held at amortized cost. The amendments in this ASU replace the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. In

November 2018,

the FASB issued ASU

No.

2018

19,

“Codification Improvements to Topic

326,

Financial Instruments-Credit Losses”, which among other things, clarifies that receivables arising from operating leases are

not

within the scope of Subtopic

326

20.

Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic

842,

Leases. For public entities, the amendments in these ASUs are effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. The Company is currently evaluating the impact on its consolidated financial position and results of operations upon adopting these amendments.

August

2018,

the FASB issued ASU

No.

2018

13,

“Fair Value Measurement (Topic

820

): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this ASU eliminate, add and modify certain disclosure requirements for fair value measurements. The amendments in this ASU, among other things, require public companies to disclose the range and weighted average used to develop significant unobservable inputs for Level

fair value measurements. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019,

and entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Company does

not

expect the adoption of these amendments to have a material impact on its consolidated financial position and results of operations.