UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 on
FORM 20-F/A
£ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
R | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2011.
OR
£ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
£ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period from __________ to ___________
Commission file number 001-34136
China Cablecom Holdings, Ltd.
(Exact name of the Registrant as specified in its charter)
British Virgin Islands
(Jurisdiction of incorporation or organization)
Room 458, North Building, Wenjiao Plaza
No. 1 Qingnian Dong Road
Jinan, People’s Republic of China 250001
(Address of principal executive offices)
Kerry Propper, (646) 465-9000
17 State Street, Suite 2575, New York, NY 10004
(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class | Name of each exchange on which registered |
None
Securities registered or to be registered pursuant to Section 12(g) of the Act: ORDINARY SHARES, $.0015 PAR VALUE
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
On December 31, 2011, the registrant had 13,693,780 ordinary shares outstanding.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
¨ Yes x No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
¨ Yes x No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
x Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
¨ Yes x No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
¨ Large Accelerated filer | ¨ Accelerated filer | x Non-accelerated filer |
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
x US GAAP | ¨ International Financial Reporting Standards as issued by the International Accounting Standards Board | ¨ Other |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
¨ Item 17 ¨ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
S Yes £ No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of the securities under a plan confirmed by a court.
¨ Yes ¨ No
EXPLANATORY NOTE
This Amendment No. 1 to the Annual Report on Form 20-F of China Cablecom Holdings Limited (the “Company”) amends the Company’s Annual Report on Form 20-F for the year ended December 31, 2011, (the “Original Filing”) which was filed with the Securities and Exchange Commission on October 2, 2013. The Company is filing this Amendment No. 1 solely to provide Exhibit 101, which was not included in the Original Filing. Exhibit 101 includes information about the Company in Extensible Business Reporting Language (XBRL).
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Amendment No. 1 is accompanied by currently dated certifications on Exhibits 12.1, 12.2 and 13.1 by our chief executive officer and chief financial officer. Except as specifically referenced herein, this Amendment No. 1 does not reflect any event occurring subsequent to October 2, 2013, the filing date of the original report. Accordingly, this Amendment No. 1 should be read in conjunction with our other filings with the Securities and Exchange Commission.
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, and are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under these sections.
i |
TABLE OF CONTENTS
PART III | |||||
ITEM 19. | EXHIBITS | 44 |
ii |
PART III
ITEM 19. | EXHIBITS |
Exhibit Number |
Description of Exhibit | |
1.1 * | China Cablecom Holdings Amended and Restated Memorandum of Association | |
1.2 * | China Cablecom Holdings Amended and Restated Articles of Association | |
2.1 (1) | Specimen Unit Certificate | |
2.2 (1) | Specimen Ordinary Share Certificate | |
2.3 (1) | Form of Unit Purchase Option | |
2.4 (1) | Form of Warrant | |
2.5 (2) | Form of Warrant Agreement | |
4.1 (1) | The China Cablecom Holdings 2007 Omnibus Securities and Incentive Plan | |
4.2 (1) | Warrants Exercise Proceeds Award Agreement between China Cablecom Holdings and James S. Cassano | |
4.3 (1) | Warrants Exercise Proceeds Award Agreement between China Cablecom Holdings and Kerry Proper | |
4.4 (1) | Warrants Exercise Proceeds Award Agreement between China Cablecom Holdings and Jonathan Kalman | |
4.5 (1) | Warrants Exercise Proceeds Award Agreement between China Cablecom Holdings and Clive Ng | |
4.6 (1) | Incentive Share Agreement between China Cablecom Holdings and James S. Cassano | |
4.7 (1) | Incentive Share Agreement between China Cablecom Holdings and Kerry Proper | |
4.8 (1) | Incentive Share Agreement between China Cablecom Holdings and Jonathan Kalman | |
4.9 (1) | Form of Consulting Agreement between China Cablecom Holdings and China Cablecom Holdings Limited, a Cayman Islands limited company | |
4.10 (1) | Form of Employment Agreement between China Cablecom Holdings and Clive Ng | |
4.11 (1) | Promissory Note from China Cablecom to Jaguar in the initial principal amount of $475,000 | |
4.12 (1) | Purchase Agreement, dated as of September 19, 2007, by and among China Cablecom Ltd. and the entities listed on the Schedule of Investors attached thereto as Schedule I | |
4.13 (1) | Form of First Closing Promissory Note | |
4.14 (1) | Registration Rights Agreement, dated September 19, 2007, by and among China Cablecom Ltd. and the entities listed on the Schedule A attached thereto | |
4.15 (1) | Share Pledge Agreement, dated as of September 19, 2007, by Clive Ng in favor of the persons and entities listed on the Schedule of Investors attached thereto as Schedule III | |
4.16 (2) | Form of Registration Rights Agreement among the Registrant and the Initial Stockholders | |
4.17( 2) | Form of Stock Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Stockholders | |
4.18 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and Jonathan Kalman | |
4.19 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and C. Richard Corl | |
4.20 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and James S. Cassano |
44 |
Exhibit Number |
Description of Exhibit | |
4.21 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and John J. Hoey | |
4.22 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and William J. Westervelt, Jr. | |
4.23 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and David W. Tralka | |
4.24 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and Robert Moreyra | |
4.25 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and Peter Collins | |
4.26 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and Sapphire Canyon Investments LLC | |
4.27 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and Corl LLC | |
4.28 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and JSC Group Holdings LLC | |
4.29 (2) | Letter Agreement among the Registrant, Early Bird Capital, Inc. and PA Holdings, LLC | |
4.30 (1) | Framework Agreement by and between Binzhou Broadcasting and Television Network Co., Ltd. and Jinan Youxiantong Network Technology Co., Ltd., August 2007 | |
4.31 (1) | Asset Transfer Agreement by and between Binzhou Broadcasting and Television Network Co., Ltd. and Binzhou Broadcast and Television Information Network Co., Ltd., September 2007 | |
4.32 (1) | Exclusive Service Agreement between Binzhou Broadcasting and Television Network Co., Ltd. and Binzhou Broadcast and Television Information Network Co., Ltd., September 2007 | |
4.33 (1) | Technical Services Agreement between Binzhou Broadcast and Television Information and Network Co., Ltd. and Jinan Youxiantong Network Technology Co., Ltd., September 2007 | |
4.34 (1) | Equity Option Agreement by and between Heze Cablecom Network Technology Co., Ltd. and Liang Yue Jing, July 2007 | |
4.35 (1) | Equity Option Agreement by and between Heze Cablecom Network Technology Co., Ltd. and Pu Yue, July 2007 | |
4.36 (1) | Equity Pledge Agreement by and between Heze Cablecom Network Technology Co., Ltd. and Lian Yue Jing, July 2007 | |
4.37 (1) | Equity Pledge Agreement by and between Heze Cablecom Network Technology Co., Ltd. and Pu Yue, July 2007 | |
4.38 (1) | Loan Agreement by and between China Cablecom Co. Ltd. (Hong Kong) and Liang Yue-Jing, June 2007 | |
4.39 (1) | Loan Agreement by and between China Cablecom Co. Ltd. (Hong Kong) and Pu Yue, June 2007 | |
4.40 (1) | Power of Attorney granted by Lian Yue Jing, July 16, 2007 | |
4.41 (1) | Power of Attorney granted by Pue Yue, July 16, 2007 | |
4.42 (1) | Trustee Arrangement Letter, by and between China Cablecom Co., Ltd. (Hong Kong) and Lian Yue Jing, June 30, 2007 | |
4.43 (1) | Trustee Arrangement Letter, by and between China Cablecom Co., Ltd. (Hong Kong) and Pu Yue, June 30, 2007 | |
4.44 (1) | Supplementary Agreement to the Framework Agreement, by and between Binzhou Broadcasting and Television Network, Co., Ltd. and Jinan Youxiantong Network Technology Co. Ltd., dated August 6, 2007 | |
4.45 (3) | Settlement Agreement by and between China Broadband, Inc., China Broadband, Ltd., China Broadband, Inc., Stephen P. Cherner, Maxim Financial Corporation, Mark L. Baum, BCGU, LLC, Mark I. Lev, Wellfleet Partners, Inc., Pu Yue, Clive Ng, Chardan Capital Markets, LLC, Jaguar Acquisition Corporation and China Cablecom Holdings, Ltd. dated January 9, 2008 | |
4.46 (1) | Form of Voting Agreement by and between Jaguar Acquisition Corporation, China Cablecom Holdings, Ltd., Certain Shareholders of Jaguar Acquisition Corporation and Clive Ng. | |
4.47 (1) | Form of Employment Agreement by and between China Cablecom Holdings, Ltd. and Pu Yue. | |
4.48 (4) | Unit Purchase Option Clarification Agreement dated as of January 30, 2008 by Jaguar Acquisition Corporation. | |
4.49 (4) | Warrant Clarification Agreement dated January 30, 2008 by and between Jaguar Acquisition Corporation and Continental Stock Transfer & Trust Company. |
45 |
Exhibit Number |
Description of Exhibit | |
4.50 (5) | Offshore Loan Agreement between China Cablecom and Rich Dynamic Limited, dated June 10, 2008. | |
4.51 (6) | Offshore Loan Agreement between China Cablecom and Rich Dynamic Limited, dated July 29, 2008. | |
4.52 (7) | Onshore Loan Agreement between Dong Wanling and JYNT, dated June 10, 2008. | |
4.53 (8) | Onshore Loan Agreement between Dong Wanling and JYNT, dated June 10, 2008. | |
4.54 * | Supplement to Framework Agreement dated September 29, 2009 | |
4.55 * | Form of Hubei Chutian Loan Agreement dated September 29, 2009 | |
4.56 * | Subscription Agreement dated October 9, 2009 | |
4.57 * | Form of New Note | |
4.58 * | New Notes Security Agreement | |
4.59 * | Senior Secured Subsidiary Guaranty | |
4.60 * | Collateral Agent Agreement | |
4.61 * | Intercreditor Agreement dated October 9, 2009 | |
4.62 * | Warrant for Chardan Capital Markets LLC | |
4.63 * | Secured Notes Exchange and Waiver Agreement dated October 9, 2009 | |
4.64 * | Form of New Junior Secured Notes | |
4.65 * | Junior Secured Security Agreement dated October 9, 2009 | |
4.66 * | Junior Secured Subsidiary Guaranty dated October 9, 2009 | |
4.67 * | Unsecured Notes Exchange and Waiver Agreement dated October 9, 2009 | |
4.68 * | Form of New Unsecured Notes | |
4.69 * | Unsecured Notes Subsidiary Guaranty dated October 9, 2009 | |
4.70 *** | Termination Agreement among Hubei Chutian Radio and Television Information Network Co., Ltd., Jinan Youxiantong Network Technology Co., Ltd., and Hubei Chutian Video Communication Network Co., Ltd. dated March 22, 2012. | |
4.71 *** | Equity Transfer Agreement among Hubei Chutian Radio and Television Information Network Co., Ltd., Jinan Youxiantong Network Technology Co., Ltd., and Hubei Chutian Video Communication Network Co., Ltd. dated June 15, 2012 | |
8.1 (9) | List of subsidiaries | |
11.1 (10) | China Cablecom Holdings Ltd. Code of Business Conduct and Ethics | |
12.1 ** | Certification of Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. | |
12.2 ** | Certification of Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002. | |
13.1 ** | Certification of Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002. |
101** Interactive Data File
* | Incorporated by reference to the similarly numbered exhibit to the Annual Report on Form 20-F filed on July 1, 2010. |
** | Filed herewith. |
*** | Previously Filed |
(1) | Incorporated by reference to the Company’s Registration Statement on Form S-4 (Registration No. 333-147038). |
(2) | Incorporated by reference to Jaguar Acquisition Corp. Registration Statement on Form S-1 (Registration No. 333-127135). |
(3) | Incorporated by reference to Exhibit No. 10.1 to the Current Report on Form 8-K filed with the SEC by China Broadband, Inc. on January 17, 2008. |
(4) | Incorporated by reference to the Quarterly Report on Form 10-QSB filed with the SEC by Jaguar Acquisition Corp. on February 14, 2008. |
(5) | Incorporated by reference to Exhibit No. 4.50 to the Annual Report on Form 20-F filed on July 15, 2009. |
(6) | Incorporated by reference to Exhibit No. 4.51 to the Annual Report on Form 20-F filed on July 15, 2009. |
(7) | Incorporated by reference to Exhibit No. 4.52 to the Annual Report on Form 20-F filed on July 15, 2009. |
(8) | Incorporated by reference to Exhibit No. 4.53 to the Annual Report on Form 20-F filed on July 15, 2009. |
(9) | Incorporated by reference to Exhibit No. 8.1 of the Annual Report on Form 20-F filed on July 15, 2009. |
(10) | Incorporated by reference to Exhibit No. 11.1 of the Annual Report on Form 20-F filed on July 15, 2009. |
46 |
SIGNATURES
The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
CHINA CABLECOM HOLDINGS, LTD | |||||
By: | /s/ Pu Yue | By: | /s/ Sikan Tong | ||
Name: | Pu Yue | Name: | Sikan Tong | ||
Title: | Chief Executive Officer | Title: | Chief Financial Officer | ||
Date: | 2013-12-18 | Date: | 2013-12-18 |
47 |
EXHIBIT 12.1
CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULES 13a-14 and 15d-14
OF THE SECURITIES EXCHANGE ACT OF 1934
I, Pu Yue, certify that:
1. | I have reviewed this annual report on Form 20-F/A for the fiscal year ended December 31, 2011 of China Cablecom Holdings, Ltd. (the “Registrant”); |
2. | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; |
3. | Based on my knowledge, the financial statements and other financial information included in this annual report fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report; |
4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and |
(d) | disclosed in this annual report any change in the Registrant’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and; |
5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
Date: December 18, 2013
/s/ Pu Yue | |
Name: Pu Yue | |
Title: Chief Executive Officer |
EXHIBIT 12.2
CERTIFICATION BY PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULES 13a-14 and 15d-14
OF THE SECURITIES EXCHANGE ACT OF 1934
I, Sikan Tong, certify that:
1. | I have reviewed this annual report on Form 20-F for the fiscal year ended December 31, 2011 of China Cablecom Holdings, Ltd. (the “Registrant”); |
2. | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; |
3. | Based on my knowledge, the financial statements and other financial information included in this annual report fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report; |
4. | The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and |
(d) | disclosed in this annual report any change in the Registrant’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. | The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
Date: December 18, 2013
/s/ Sikan Tong | |
Name: Sikan Tong | |
Title: Chief Financial Officer |
EXHIBIT 13.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of China Cablecom Holdings, Ltd. (the “Registrant”) on Form 20-F/A for the year ended December 31, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Pu Yue and Sikan Tong, the Chief Executive Officer and Chief Financial Officer of the Registrant, respectively certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to the best of our knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
Pursuant to the rules and regulations of the Securities and Exchange Commission, this certification is being furnished and not deemed filed.
December 18, 2013
/s/ Pu Yue | |
Name: Pu Yue | |
Title: Chief Executive Officer | |
/s/ Sikan Tong | |
Name: Sikan Tong | |
Title: Chief Financial Officer |
A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.
Investment in operating joint venture
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Equity Method Investments and Joint Ventures Disclosure [Text Block] |
Loan advance represents investment fund contributed to the joint ventures and such advances were unsecured, interest free and repayable on demand. The loan advance to Hubei Chutian will be settled as part of the deal made between JYNT and Hubei SOE in 2012. Binzhou Broadcasting and Television Information Network Co., Ltd On October 1, 2007, the Company through JYNT entered into a joint venture partnership with its partner Binzhou SOE and formed Binzhou Broadcasting and Television Information Network Co., Ltd. (“Binzhou Broadcasting”) and agreed to acquire 49% equity interest in Binzhou Broadcasting. The principal activity of Binzhou Broadcasting is provision of cable network services. Up to the reporting date, JYNT had only contributed $14 million to Binzhou Broadcasting and there was a further capital contribution of $16 million had been due but not yet settled. During the year ended December 31, 2011, Binzhou SOE charged a penalty of $754,979 (RMB5,000,000) against JYNT for the failure of settlement of further capital contribution of $16 million in accordance with the “Amendment Framework Agreement”. As a result, the economic benefit percentage of JYNT and Binzhou SOE in Binzhou Broadcasting will be proportionally adjusted to reflect the actual fund provided and the deduction of penalty. Meanwhile, both parties shall negotiate the existence and continued operation of the Binzhou Broadcasting triggered such failure of the obligation of JYNT. In late 2010, the Government of Shandong Province made an announcement for the consolidation of its provincial cable assets in Shandong Province. In accordance with “Lu Ban Fa” (2010) No.18, the Province will create a new company namely “Shandong Broadcasting and Television Network Co., Ltd.” and required all the cable network companies in Shandong Province to transfer all its assets and revenue to Shandong Broadcasting and Television Network Co., Ltd. Under this government policy, Binzhou Broadcasting is also required to transfer all its assets and revenue to the new company with effective from September 16, 2011. The business operation of Binzhou Broadcasting was suspended since then. All the contractual agreement and the exclusive services agreement made between JYNT, Binzhou SOE and Binzhou Broadcasting were effectively terminated accordingly. The Company is still in the process of negotiation on the compensation of its investments in Binzhou Broadcasting with its joint venture partner, Binzhou SOE. However, the business operation has been transferred to Shandong Broadcasting and Television Network Co., Ltd. since September 16, 2011 although Binzhou Broadcasting still holds all the operating assets. The Company believes a settlement can be reached with Binzhou SOE and/or Shandong Broadcasting and Television Network Co., Ltd. to receive a compensation for its investment which will be more than its carrying value. However, the settlement of such compensation was uncertain at the reporting date. Therefore, the management decided to make a full provision on its investment cost and loan advances, totalling $9,806,150. The Company accounts for the percentage of investment, under the equity method of accounting, based on actual equity contribution made by JYNT at each of the reporting date. For the years ended December 31, 2011, 2010 and 2009, the Company was entitled to account for economic benefit shared in Binzhou Broadcasting approximately 26.1%, 27.6% and 27.6% respectively. Summarized financial information of Binzhou Broadcasting as of December 31, 2011, 2010 and 2009 are as follows:
Summarized financial information of Binzhou Broadcasting for the years ended December 31, 2011, 2010 and 2009 are as follows:
Hubei Chutian Video Communication Network Co., Ltd On June 16, 2008, the Company through JYNT entered into a joint venture partnership with its partner Hubei SOE and formed Hubei Chutian Video Communication Network Co., Ltd. (‘Hubei Chutian”) and agreed to acquire 49% equity interest in Hubei Chutian. The principal activity of Hubei Chutian is provision of cable network services. The Company accounts for the percentage of investment, under the equity method of accounting, based on actual equity contribution made by JYNT at each of the reporting date. For the years ended 2011, 2010 and 2009, the Company was entitled to account for economic benefit shared in Hubei Chutian approximately 49%, 49% and 49% respectively. On October 20, 2011, JYNT was approached by the joint venture partner, Hubei SOE, regarding the purchase of the assets and equity interest in Hubei Chutian. The parties entered into a Termination Agreement on March 22, 2012 and an Equity Transfer Agreement on June 15, 2012, pursuant to which the parties agreed to consideration of $59,378,819 (RMB374,140,000) for the purchase by Hubei SOE of the assets and equity interest in Hubei Chutian. JYNT agreed to transfer back all 49% equity interest of Hubei Chutian to Hubei SOE and to terminate the joint venture contractual agreement, technical services agreement and loan agreement with Hubei Chutian and Hubei SOE respectively. The estimated gain of disposal of Hubei Chutian was $9 million. As a result, Hubei Chutian was no longer the operating joint venture of JYNT since then. Summarized financial information of Hubei Chutian as of December 31, 2011, 2010 and 2009 are as follows:
Summarized financial information of Hubei Chutian for the years ended December 31, 2011, 2010 and 2009 are as follows:
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