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Note 20 - Concentration of Risk | 6 Months Ended
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Jun. 30, 2019
Notes to Financial Statements |
Concentration Risk Disclosure [Text Block] |
20. | Concentration of risk
Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. As of June 30, 2019, 50% of the Company’s cash and cash equivalents were held by major financial institutions located in Mainland China, the remaining 50% was held by a financial institution located in the United States of America. The Company believes that these financial institutions located in Mainland China and the United States of America are of high credit quality. For accounts receivable, the Company extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral or other security. In order to minimize the credit risk, the Company delegated a team responsible for credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. Further, the Company reviews the recoverable amount of each individual receivable at each balance sheet date to ensure that adequate allowances are made for doubtful accounts. In this regard, the Company considers that the Company’s credit risk for accounts receivable and other receivables is significantly reduced. Risk arising from operations in foreign countries All of the Company’s operations are conducted within the PRC. The Company’s operations in the PRC are subject to various political, economic, and other risks and uncertainties inherent in the PRC. Among other risks, the Company’s operations in the PRC are subject to the risks of restrictions on transfer of funds, changing taxation policies, foreign exchange restrictions; and political conditions and governmental regulations. Currency convertibility risk Significant part of the Company’s businesses is transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. These exchange control measures imposed by the PRC government authorities may restrict the ability of the Company’s PRC subsidiaries and VIEs to transfer its net assets, which to the Company through loans, advances or cash dividends. Concentration of customers The following tables summarized the information about the Company’s concentration of customers for the six and three months ended June 30, 2019 and 2018, respectively:
|  | Customer A |  | Customer B |  | Customer C
Six Months Ended June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Revenues, customer concentration risk |  |  | 13 | % |  |  | - |  |  |  | * |
Three Months Ended June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Revenues, customer concentration risk |  |  | 11 | % |  |  | - |  |  |  | - |
Six Months Ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Revenues, customer concentration risk |  |  | 14 | % |  |  | 14 | % |  |  | * |
Three Months Ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Revenues, customer concentration risk |  |  | 19 | % |  |  | * |  |  |  | 11 | %
As of June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, customer concentration risk |  |  | 66 | % |  |  | - |  |  |  | * |
As of December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, customer concentration risk |  |  | 74 | % |  |  | - |  |  |  | 12 | %
* Less than 10%. - No transaction incurred for the reporting period/no balance existed as of the reporting date. Concentration of suppliers The following tables summarized the information about the Company’s concentration of suppliers for the six and three months ended June 30, 2019 and 2018, respectively:
|  | Supplier A |  | Supplier B
Six Months Ended June 30, 2019 |  |  |  |  |  |  |  |
Cost of revenues, supplier concentration risk |  |  | 90 | % |  |  | * |
Three Months Ended June 30, 2019 |  |  |  |  |  |  |  |
Cost of revenues, supplier concentration risk |  |  | 91 | % |  |  | * |
Six Months Ended June 30, 2018 |  |  |  |  |  |  |  |
Cost of revenues, supplier concentration risk |  |  | 83 | % |  |  | 13 | %
Three Months Ended June 30, 2018 |  |  |  |  |  |  |  |
Cost of revenues, supplier concentration risk |  |  | 87 | % |  |  | 10 | %
* Less than 10%.

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- Definition The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI http://asc.fasb.org/topic&trid=2134479 + Details
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