Related Party Transactions

3 Months Ended

Mar. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

7.             Related Party Transactions

Shandong Media

Loan Receivable

During the three months ended March 31, 2012, the Company's loan receivable from Music Magazine increased approximately $2,000, due to currency fluctuations. At March 31, 2012 and December 31, 2011, approximately $319,000 and $317,000, respectively, is due to 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. Pursuant to the MOU, we will work with our related party to settle this loan.

Prepaid Expense

As of March 31, 2012 and December 31, 2011, Shandong Media prepaid $180,000 and $193,000, respectively, to Modern Movie for rental of space for company functions.

Amounts due from Shareholders

As of March 31, 2012 and December 31, 2011, amounts due from shareholders include approximately $450,000 and $415,000, respectively, representing advances 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 $137,000 and $103,000 at March 31, 2012 and December 31, 2011, respectively, from Shandong Broadcast is unsecured, interest free and has no fixed repayment terms. The amount due of approximately $313,000 and $312,000 at March 31, 2012 and December 31, 2011, respectively, from Modern Movie is unsecured, interest free and is due on December 31, 2012. Pursuant to the MOU, we will work with our related parties to settle this loan.

Other Current Liabilities

As of March 31, 2012 and December 31, 2011, Shandong Media had a payable of approximately $95,000 and $89,000, respectively, 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 three months ended March 31, 2012, our payable to Jinan Parent increased approximately $1,000, due to currency fluctuations. At March 31, 2012 and December 31, 2011, approximately $144,000 and $143,000, 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 three month periods ended March 31, 2012 and 2011, Jinan Broadband generated $102,000 and $38,000 of value-added service revenue from an affiliate, Jinan Radio and Television Networks Center ("Networks Center").  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.

Cost of Revenue

During the three months ended March 31, 2012 and 2011, Jinan Broadband incurred service fees to Networks Center of approximately $12,000 and $9,000, respectively. 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.

General and Administrative Expense

During the three month periods ended March 31, 2012 and 2011, Jinan Broadband paid sales agency fees of approximately $22,000 and $11,000 to Networks Center for revenue collection on behalf of Jinan Broadband and network maintenance.

Accounts Payable

As of March 31, 2012 and December 31, 2011, Jinan Broadband had accounts payable to Networks Center of approximately $270,000 and $268,000, respectively, 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.

Accrued Expense
 

Jinan Broadband had accrued network leasing fees to Networks Center of approximately $47,000 as of March 31, 2012 and December 31, 2011.

Amount due from Non-controlling Interest

Subsequent to our acquisition of Sinotop Hong Kong 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. As of March 31, 2012, Sinotop contributed RMB 10 million while Hua Cheng has not made its capital contribution.  Accordingly, we have recorded an amount due from non-controlling interest in the amount of $1,582,655.  We are currently in the process of reducing the registered capital from RMB 50 million (USD 7,913,271) to RMB 12.5 million (USD 1,978,318).  Thus, Sinotop will have contributed its full amount of RMB 10 million (USD 1,582,654) (80%).  After approval of the capital reduction application, Hua Cheng will contribute its RMB 2.5 million (USD 395,664) (20%).