<SEC-DOCUMENT>0001171843-14-003314.txt : 20140718
<SEC-HEADER>0001171843-14-003314.hdr.sgml : 20140718
<ACCEPTANCE-DATETIME>20140718074519
ACCESSION NUMBER:		0001171843-14-003314
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20140718
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20140718
DATE AS OF CHANGE:		20140718

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ChinaNet Online Holdings, Inc.
		CENTRAL INDEX KEY:			0001376321
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-ADVERTISING AGENCIES [7311]
		IRS NUMBER:				204672080
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34647
		FILM NUMBER:		14981691

	BUSINESS ADDRESS:	
		STREET 1:		NO.3 MIN ZHUANG ROAD, BUILDING 6,
		STREET 2:		YU QUAN HUI GU TUSPARK,
		CITY:			HAIDIAN DISTRICT, BEIJING,
		STATE:			F4
		ZIP:			100195
		BUSINESS PHONE:		888-419-9455

	MAIL ADDRESS:	
		STREET 1:		101-C N. GREENVILLE AVENUE
		STREET 2:		SUITE 255
		CITY:			ALLEN
		STATE:			TX
		ZIP:			75002

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	EMAZING INTERACTIVE, INC.
		DATE OF NAME CHANGE:	20060922
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>document.htm
<DESCRIPTION>FORM 8-K FILING DOCUMENT
<TEXT>
<html>

	<head>
		<title>Form 8-K Filing</title>
	</head>

	<body>
		<p align="center"><b>UNITED STATES</b><br>
			<b>SECURITIES AND EXCHANGE COMMISSION</b><br>
			<b>Washington, D.C. 20549</b><br>
			__________________</p>
		<p align="center"><b>FORM 8-K</b></p>
		<p align="center"><font size="2"><b>CURRENT REPORT<br>
					PURSUANT TO SECTION 13 OR 15(d) OF THE<br>
					SECURITIES EXCHANGE ACT OF 1934</b></font></p>
		<p align="center"><font size="2">Date of Report (Date of earliest event Reported): July 18, 2014 </font></p>
		<p align="center"><font size="4"><b><u>ChinaNet Online Holdings, Inc.</u></b></font><br>
			<font size="2">(Exact Name of Registrant as Specified in Charter)</font></p>
		<!-- Registrant's State of Inc, File and IRS Number -->
		<table cellpadding="0" border="0" width="100%" cellspacing="0">
			<tr valign="top">
				<td width="32%" align="center" style="border-bottom: 1pt solid black"><font size="2"><b>Nevada</b></font></td>
				<td width="3%"><font size="2">&nbsp;</font></td>
				<td width="32%" align="center" style="border-bottom: 1pt solid black"><font size="2"><b>001-34647</b></font></td>
				<td width="3%"><font size="2">&nbsp;</font></td>
				<td width="32%" align="center" style="border-bottom: 1pt solid black"><font size="2"><b>20-4672080</b></font></td>
			</tr>
			<tr valign="top">
				<td width="32%" align="center"><font size="2">(State or Other Jurisdiction of Incorporation) </font></td>
				<td width="3%"><font size="2">&nbsp;</font></td>
				<td width="32%" align="center"><font size="2">(Commission File Number) </font></td>
				<td width="3%"><font size="2">&nbsp;</font></td>
				<td width="32%" align="center"><font size="2">(I.R.S. Employer Identification Number) </font></td>
			</tr>
		</table>
		<!-- Registrant's Postal Addess and Zip Code --><br>
		<table cellpadding="0" border="0" width="100%" cellspacing="0">
			<tr valign="bottom">
				<td width="47%" align="center" style="border-bottom: 1pt solid black"><font size="2"><b>No. 3 Min Zhuang Road, Building 6,<br>
Yu Quan Hui Gu Tuspark, Haidian District, Beijing, PRC 100195</b></font><br>
				</td>
			</tr>
			<tr valign="top">
				<td width="47%" align="center"><font size="2">(Address of Principal Executive Offices and Zip Code)</font></td>
			</tr>
		</table>
		<p align="center"><font size="2">Registrant's telephone number, including area code: <b>+86-10-51600828</b></font></p>
		<p align="center"><br>
			<font size="2"><b>________________________________________________________________________________</b><br>
			(Former name or former address, if changed since last report)</font><font size="2"><b></b></font></p>
		<!-- Simultaneous filing obligation checkboxes --><br>
		<table cellpadding="0" border="0" width="100%" cellspacing="0">
			<tr valign="top">
				<td colspan="3"><font size="2">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:<br>
						<br>
					</font></td>
			</tr>
			<tr valign="top">
				<td width="21"><font size="2">&nbsp;</font></td>
				<td width="40"><font size="2">[ &nbsp;&nbsp;]</font></td>
				<td nowrap><font size="2">&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </font></td>
			</tr>
			<tr valign="top">
				<td width="21"><font size="2">&nbsp;</font></td>
				<td width="40"><font size="2">[ &nbsp;&nbsp;]</font></td>
				<td nowrap><font size="2">&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </font></td>
			</tr>
			<tr valign="top">
				<td width="21"><font size="2">&nbsp;</font></td>
				<td width="40"><font size="2">[ &nbsp;&nbsp;]</font></td>
				<td nowrap><font size="2">&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </font></td>
			</tr>
			<tr valign="top">
				<td width="21"><font size="2">&nbsp;</font></td>
				<td width="40"><font size="2">[ &nbsp;&nbsp;]</font></td>
				<td nowrap><font size="2">&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </font></td>
			</tr>
		</table>
		<br>
		<hr noshade="1">
		<font size="2"></font>
		<p><b><p><font size="3"><b>Item 2.02. Results of Operations and Financial Condition.</b></font></p></b></p>
		<p><font size="2"><p>
	On July 18, 2014, ChinaNet Online Holdings, Inc., a Nevada corporation (the &quot;Company&quot;), issued a press release containing certain financial results for its first fiscal quarter of 2014 and guidance for fiscal 2014. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1.</p>
<p>
	 </p>
<p>
	As provided in General Instruction B.2 of SEC Form 8-K, such information shall not be deemed &quot;filed&quot; for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the &quot;Exchange Act&quot;), 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.</p>
</font></p>
		<font size="2"></font>
		<p><b><p><font size="3"><b>Item 9.01. Financial Statements and Exhibits.</b></font></p></b></p>
		<p><font size="2"><p>
	(d) Exhibits.</p>
<p>
	 </p>
<table border="0" cellpadding="0" cellspacing="0" width="631">

		<tr>
			<td valign="top" width="103">
				<p>
					<font style="font-size: 12px;"><b><u>No.</u></b></font></p>
			</td>
			<td valign="top" width="528">
				<p>
					<font style="font-size: 12px;"><b><u>Description </u></b></font></p>
			</td>
		</tr>
		<tr>
			<td valign="top" width="103">
				<p>
					<font style="font-size: 12px;">99.1</font></p>
			</td>
			<td valign="top" width="528">
				<p>
					<font style="font-size: 12px;">Press Release dated July 18, 2014.</font></p>
			</td>
		</tr>

</table>
</font></p>
		<hr noshade="1">
		<!-- Registrant's Signature -->
		<p align="center"><b><font size="2">SIGNATURE</font></b></p>
		<p><font size="2">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.</font></p>
		<table cellpadding="0" border="0" width="100%" cellspacing="0">
			<tr valign="top">
				<td width="47%" valign="top"><font size="2">Date: July 18, 2014</font></td>
				<td colspan="2" valign="top"><font size="2">ChinaNet Online Holdings, Inc.<br>
					<br>
					</font></td>
			</tr>
			<tr valign="top">
				<td width="47%">
					<p></p>
				</td>
				<td width="5%"><font size="2">&nbsp;By: &nbsp;</font></td>
				<td width="47%"><font size="2"><u>/s/ Handong Cheng<!--HANDONG CHENG--></u><br>
					Handong Cheng<br>
					Chief Executive Officer</font></td>
			</tr>
		</table>
		<font size="2"><hr />
<p style="text-align: center;">
	<strong>EXHIBIT INDEX</strong></p>
<p>
	 </p>
<table border="0" cellpadding="0" cellspacing="0" width="631">

		<tr>
			<td valign="top" width="103">
				<p>
					<font style="font-size: 12px;"><b><u>Exhibit No.</u></b></font></p>
			</td>
			<td valign="top" width="528">
				<p>
					<font style="font-size: 12px;"><b><u>Description </u></b></font></p>
			</td>
		</tr>
		<tr>
			<td valign="top" width="103">
				<p>
					<font style="font-size: 12px;">99.1</font></p>
			</td>
			<td valign="top" width="528">
				<p>
					<font style="font-size: 12px;">Press Release dated July 18, 2014.</font></p>
			</td>
		</tr>

</table>
</font>
	</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>newsrelease.htm
<DESCRIPTION>PRESS RELEASE
<TEXT>
<html><head><title>ChinaNet Online Holdings Reports First Quarter 2014 Financial Results</title></head><body><p align="right">EXHIBIT 99.1</p><h3 align="center">ChinaNet Online Holdings Reports First Quarter 2014 Financial Results</h3><h4 align="center">Projects $39 Million Revenue for Full Year 2014</h4><p>BEIJING, July 18, 2014 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced financial results and filing of its quarterly report with the Securities and Exchange Commission (the "SEC") for the first fiscal quarter of 2014.</p><table cellpadding="0" cellspacing="6" style=" border-collapse: separate; border-spacing: 6px ">

		<tr>
			<td colspan="4" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Summary Financials</strong></td>
		</tr>
		<tr>
			<td colspan="4" style="font: 12px Arial; vertical-align: bottom; text-align: left; border-bottom: solid black 1.0pt;">
				&#160;</td>
		</tr>
		<tr>
			<td colspan="4" style="font: 12px Arial; vertical-align: bottom; text-align: left; border-bottom: solid black 1.0pt;">
				<strong>First Quarter 2014 Results (USD) </strong><strong>(Unaudited)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; border-bottom: solid black 1.0pt;">
				&#160;</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>Q1 2014</strong></td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>Q1 2013</strong></td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>CHANGE</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; border-bottom: solid black 1.0pt;">
				Sales</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				$5.2 million</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				$7.0 million</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				-26%</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; border-bottom: solid black 1.0pt;">
				Gross Profit</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				$1.4 million</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				$2.6 million</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				-47%</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; border-bottom: solid black 1.0pt;">
				Gross Margin</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				26.3%</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				36.6%</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				-28%</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; border-bottom: solid black 1.0pt;">
				Net (Loss)/Income Attributable to ChinaNet</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				($0.7) million</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				0.03 million</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				--</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; border-bottom: solid black 1.0pt;">
				EPS (Diluted)</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				($0.03)</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				$0.00</td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				--</td>
		</tr>

</table><p>
	<strong>First Quarter 2014 Financial Results</strong><strong>&#160;&#160; </strong></p><p>
	Revenues for the three months ended March 31, 2014 were $5.2 million compared to $7.0 million for the three months ended March 31, 2013, representing a 26% decrease. Low margin TV advertising revenue fell by $1.5 million, or 55%, accounting for the majority of the year-over-year revenue decline.</p><table cellpadding="0" cellspacing="6" style=" border-collapse: separate; border-spacing: 6px ">

		<tr>
			<td colspan="6" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>First Quarter 2014 Revenue Breakdown by Business Unit (USD in thousands)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; text-align: center">
				<strong>Q1 2014</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>%</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>Q1 2013</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>%</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>% Change</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				Internet Advertisement</td>
			<td style="font: 12px Arial; text-align: center">
				$3,580</td>
			<td style="font: 12px Arial; text-align: center">
				69%</td>
			<td style="font: 12px Arial; text-align: center">
				$3,811</td>
			<td style="font: 12px Arial; text-align: center">
				54%</td>
			<td style="font: 12px Arial; text-align: center">
				-6%</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				TV Advertisement</td>
			<td style="font: 12px Arial; text-align: center">
				$1,182</td>
			<td style="font: 12px Arial; text-align: center">
				23%</td>
			<td style="font: 12px Arial; text-align: center">
				$2,638</td>
			<td style="font: 12px Arial; text-align: center">
				37%</td>
			<td style="font: 12px Arial; text-align: center">
				-55%</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				Bank Kiosks</td>
			<td style="font: 12px Arial; text-align: center">
				$71</td>
			<td style="font: 12px Arial; text-align: center">
				1%</td>
			<td style="font: 12px Arial; text-align: center">
				$69</td>
			<td style="font: 12px Arial; text-align: center">
				1%</td>
			<td style="font: 12px Arial; text-align: center">
				-3%</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				Brand Mgmt. &amp; Sales Channel Building</td>
			<td style="font: 12px Arial; text-align: center">
				$350</td>
			<td style="font: 12px Arial; text-align: center">
				7%</td>
			<td style="font: 12px Arial; text-align: center">
				$531</td>
			<td style="font: 12px Arial; text-align: center">
				8%</td>
			<td style="font: 12px Arial; text-align: center">
				-34%</td>
		</tr>

</table><p>
	Revenue from internet advertisements and the related technical services for the three months ended March 31, 2014 decreased by 6% to $3.6 million compared to the same period a year ago, resulting from a decrease in number of customers during the period as compared to the same period of last year. The decrease in number of customers during the period was primarily due to the internal loophole on technical management incurred in the fourth fiscal quarter of 2013, which adversely affected the confidence&#160;of our customers&#160;in the effectiveness of our online advertising portals. Management has taken immediate remedial measures to regain and strengthen customer confidence. Management believes that this is an infrequent event in its ordinary course of business and that sales performance will be able to gradually recover in further periods of the year.</p><p>
	TV advertising revenue decreased by 55% to $1.2 million for the three months ended March 31, 2014 from $2.6 million for the same period in 2013. The decrease in TV advertising revenue was primarily due to the adoption of a restrictions notice to TV shopping infomercials broadcasted in provincial satellite television stations, issued by the State Administration of Press, Publication, Radio, Film and Television of the People's Republic of China (the "SARFT") in October 2013, which further restricts the content, air time and duration of these infomercials. In response to these restrictions, management plans to cooperate with the television stations to develop and produce&#160;new forms of TV program which will replace TV shopping infomercials to help clients raise their brand and product awareness, and to develop non-TV shopping advertising customers.</p><p>
	Gross profit for the three months ended March 31, 2014 was $1.4 million compared to $2.6 million for the same period in 2013. Gross margin was 26%, down from 37% in the first quarter of 2013. This decrease is a direct result of the decrease in the gross margin of the internet advertising and related technical services segment to 29% from 57% for the same period of last year.</p><p>
	The Company incurred an operating loss of $0.7 million for the three months ended March 31, 2014 compared to an operating loss of $0.1 million in the same period a year ago.</p><p>
	Net loss attributable to ChinaNet for the three months ended March 31, 2014 was $0.7 million and loss per share was $0.03, compared to a net income of $0.03 million in the first quarter of 2013.</p><p>
	<strong>Balance Sheet and Cash Flow</strong></p><p>
	The Company had $1.7 million in cash and cash equivalents as of March 31, 2014, compared to $3.4 million as of December 31, 2013, working capital of $22.6 million, compared to $24.0 million as of December 31, 2013, and a current ratio of 3.1 to 1, compared to 3.3 to 1 as of December 31, 2013. Total shareholders' equity of ChinaNet was $44.2 million at March 31, 2014 compared to $45.1 million at December 31, 2013.</p><p>
	The Company had a $1.4 million of cash outflows from operations in the first quarter of 2014 compared to a $0.4 million of cash outflows for the first three months of 2013.</p><p>
	<strong>Guidance for 2014 </strong></p><p>
	The Company is forecasting revenues of approximately $39 million for the fiscal year 2014.</p><p>
	<strong>Business Updates</strong></p><p>
	Liansuo.com, one of ChinaNet's online advertising portals, has successfully signed fifty-five new customers in the second fiscal quarter of 2014 with a strong and active marketing program that includes traditional and online advertising, trade shows and referrals. Liansuo.com provides a full suite of advertising, marketing and brand management services to small and medium sized businesses in China. New clients include Pure Fishing Inc., a leading provider of fishing equipment, and a subsidiary of Jarden Corporation and O.C.T. Mami, a leading retail apparel brand owned by Shanghai Uki Company. Liansuo.com will continue to pursue new clients as well as opportunities to expand services to existing clients.</p><p>
	Executives of ChinaNet participated in international brands curriculum "Systematic Creates Wealth" in Anhui Province, China on June 17th and 18th, 2014 to help train and promote entrepreneurs and franchise owners in the food industry. This activity was jointly organized by the Restaurant Association and "Discover China's Good Projects". The Company created "Discover China's Good Projects" in March 2013 to promote and support new projects and businesses.</p><p>
	ChinaNet filed its quarterly report on Form 10-Q for the quarter ended March 31, 2014 with the SEC on July 17, 2014. ChinaNet expects the filing of the report will enable the Company to regain compliance with NASDAQ's filing requirements set forth in Listing Rules 5250(c)(1).</p><p>
	<strong>About ChinaNet Online Holdings, Inc.</strong></p><p>
	The Company, a parent company of ChinaNet Online Media Group Ltd., incorporated in the BVI ("ChinaNet"), is a leading B2B (business to business) Internet technology company focusing on providing O2O (online to offline) sales channel expansion service for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking service for entrepreneurs in China. The Company, through certain contractual arrangements with operating companies in the PRC, provides Internet advertising and other services for Chinese SMEs via its portal websites, 28.com and Liansuo.com, TV commercials and program production via China-Net TV, and offline brand management and sales channel building services. Website: http://www.chinanet-online.com.</p><p>
	<strong>Safe Harbor</strong></p><p>
	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.</p><p align="center">
	-- FINANCIAL TABLES --</p><table cellpadding="0" cellspacing="6" style=" border-collapse: separate; border-spacing: 6px ">

		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>CHINANET ONLINE HOLDINGS, INC.</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>CONSOLIDATED BALANCE SHEETS</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				(In thousands, except for number of shares and per share data)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;<br>
				&#160;</td>
			<td nowrap="nowrap" style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>March 31, </strong><br>
				<strong>2014</strong></td>
			<td nowrap="nowrap" style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>December 31, <br>
				2013</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(US $)</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(US $)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(Unaudited)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Assets</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Current assets:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Cash and cash equivalents</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;$&#160;1,660&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;3,442&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Term deposit</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				3,439</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				3,467</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Accounts receivable, net</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				7,094</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				7,673</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other receivables, net</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				3,870</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				4,299</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Prepayment and deposit to suppliers</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				16,647</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				14,692</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Due from related parties</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				381</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				502</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other current assets</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				104</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				27</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Deferred tax assets-current</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				155</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				153</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				<strong>Total current assets</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>33,350</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>34,255</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Investment in and advance to equity investment affiliates</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				824</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				845</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Property and equipment, net</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				965</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				1,057</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Intangible assets, net</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				5,703</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				6,015</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Deposit and prepayment for purchasing of software technology</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				3,277</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				2,453</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Goodwill</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				11,356</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				11,450</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Deferred tax assets-non current</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				825</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				759</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Total Assets</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;56,300&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;56,834&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Liabilities and Equity</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Current liabilities:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Short-term bank loan</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;811&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;818&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Accounts payable</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				584</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;421</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Advances from customers</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				1,120</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				995</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Accrued payroll and other accruals</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				637</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				676</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Due to noncontrolling interest of VIE</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				195</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				--</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Taxes payable</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				7,123</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				7,029</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other payables</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				322</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				288</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				<strong>Total current liabilities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>10,792</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>10,227</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Long-term liabilities:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Deferred tax liability-non current</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				1,371</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				1,439</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Long-term borrowing from director</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				142</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				143</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				<strong>Total Liabilities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>12,305</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>11,809</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Commitments and contingencies </strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Equity:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				ChinaNet Online Holdings, Inc.'s stockholders' equity</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Common stock (US$0.001 par value; authorized 50,000,000 shares; issued and outstanding 22,376,540 shares at March 31, 2014 and December 31, 2013)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				&#160;22</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				22</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Additional paid-in capital</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				19,878</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				19,870</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Statutory reserves</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				2,602</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				2,602</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Retained earnings</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				18,297</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				18,965</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 20.0px;">
				Accumulated other comprehensive income</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				3,364</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				3,689</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				<strong>Total ChinaNet Online Holdings, Inc.'s stockholders' equity</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>44,163</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>45,148</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Noncontrolling interests</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>(168)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>(123)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Total equity</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>43,995</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>45,025</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Total Liabilities and Equity</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;56,300&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;56,834&#160;</strong></td>
		</tr>

</table><table cellpadding="0" cellspacing="6" style=" border-collapse: separate; border-spacing: 6px ">

		<tr>
			<td colspan="3" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>CHINANET ONLINE HOLDINGS, INC.</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				(In thousands, except for number of shares and per share data)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td colspan="2" nowrap="nowrap" style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>Three Months Ended March 31,</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>2014</strong></td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>2013</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(US $)</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(US $)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(Unaudited)</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(Unaudited)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Sales</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				From unrelated parties</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;5,182</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;6,990&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				From related parties</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				1</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				59</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				5,183</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				7,049</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Cost of sales</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				3,822</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				4,467</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Gross margin</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>1,361</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>2,582</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Operating expenses</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Selling expenses</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				589</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				788</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				General and administrative expenses</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				987</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				1,402</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Research and development expenses</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				450</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				449</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				2,026</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				2,639</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Loss from operations</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>(665)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>(57)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Other income (expenses)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Interest income</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				31</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				32</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Interest expense</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(16)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				--</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Other expenses</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(1)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(1)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				14</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				31</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Loss before income tax expense, equity method investments and noncontrolling interests </strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>(651)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>(26)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Income tax (expense)/benefit</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(48)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				86</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>(Loss)/income before equity method investments and noncontrolling interests </strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>(699)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>60</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Share of losses in equity investment affiliates</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(15)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(71)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net loss</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>(714)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>(11)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Net loss attributable to noncontrolling interests</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				46</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				41</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net (loss)/income attributable to ChinaNet Online Holdings, Inc.</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>(668)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>30</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>(Loss)/earnings per share</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				(Loss)/earnings per common share</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Basic</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;(0.03)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;0.00</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Diluted</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;(0.03)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;0.00</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Weighted average number of common shares outstanding:</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Basic</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>22,376,540</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>22,186,540</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 15.0px;">
				Diluted</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>22,376,540</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>22,186,540</strong></td>
		</tr>

</table><table cellpadding="0" cellspacing="6" style=" border-collapse: separate; border-spacing: 6px ">

		<tr>
			<td colspan="3" style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>CHINANET ONLINE HOLDINGS, INC.</strong> <strong>&#160;</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				<strong>CONSOLIDATED STATEMENTS OF CASH FLOWS</strong> <strong>&#160;</strong></td>
		</tr>
		<tr>
			<td colspan="3" style="font: 12px Arial; text-align: center">
				(In thousands)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td colspan="2" style="font: 12px Arial; vertical-align: bottom; text-align: left  ; font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>Three Months Ended March 31,</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>2014</strong></td>
			<td style="font: 12px Arial; text-align: center; border-bottom: solid black 1.0pt;">
				<strong>2013</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(US $)</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(US $)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(Unaudited)</strong></td>
			<td style="font: 12px Arial; text-align: center">
				<strong>(Unaudited)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Cash flows from operating activities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Net loss</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;(714)&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				$&#160;(11)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Adjustments to reconcile net </strong><strong>loss</strong><strong> to net cash </strong><strong>used in </strong><strong>operating activities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Depreciation and amortization</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				360</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				418</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Share-based compensation expenses</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				8</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				11</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Allowances for doubtful debts</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				--</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				260</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Share of losses in equity investment affiliates</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				15</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				71</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Deferred taxes</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(132)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(185)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Changes in operating assets and liabilities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Accounts receivable</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				520</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(1,297)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other receivables</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				152</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(8)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Prepayment and deposit to suppliers</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(2,089)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(406)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Due from related parties</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				118</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(49)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other current assets</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(78)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(2)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Accounts payable</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				168</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				105</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Advances from customers</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				134</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				564</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Accrued payroll and other accruals</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(36)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(29)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Other payables</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				71</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				--</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Taxes payable</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				152</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				127</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net cash</strong><strong> used in </strong><strong>operating activities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>(1,351)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>(431)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Cash flows from investing activities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Purchases of vehicles and office equipment</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(13)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(11)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Payment for acquisition of VIEs</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				--</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				(1,272)</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Repayment of short-term loan from unrelated entities</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				250</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				--</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Prepayment for purchasing of software technology</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				(850)</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				--</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net cash </strong><strong>used </strong><strong>in </strong><strong>investing </strong><strong>activities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>(613)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>(1,283)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Cash flows from financing activities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				&#160;</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>&#160;</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Short-term loan from noncontrolling interest of VIE</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				197</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				--</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net cash </strong><strong>provided by </strong><strong>financing activities</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>197</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>--</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				Effect of exchange rate fluctuation on cash and cash equivalents</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>(15)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				<strong>23</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left ">
				<strong>Net decrease in cash and cash equivalents</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>(1,782)</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap;">
				<strong>(1,691)</strong></td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Cash and cash equivalents at beginning of the period</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				3,442</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: solid black 1.0pt;">
				5,483</td>
		</tr>
		<tr>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: left; padding-left: 10.0px;">
				Cash and cash equivalents at end of the period</td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;1,660&#160;</strong></td>
			<td style="font: 12px Arial; vertical-align: bottom; text-align: right; white-space: nowrap; border-bottom: double black 2.5pt;">
				<strong>$&#160;3,792</strong></td>
		</tr>

</table><pre>CONTACT: MZ North America
         Ted Haberfield, President
         Direct: +1-760-755-2716
         Email: thaberfield@mzgroup.us
         Web: www.mzgroup.us</pre></body></html>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
