v3.26.1
Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2026
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]
 

a)

Basis of presentation 

 

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

 

The unaudited condensed consolidated interim financial information as of June 30, 2026 and for the six and three months ended June 30, 2026 and 2025 have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in complete consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited condensed consolidated interim financial information should be read in conjunction with the financial statements and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, previously filed with the SEC (the “2025 Form 10-K”) on March 31, 2026.

 

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s condensed consolidated financial position as of June 30, 2026, its condensed consolidated results of operations for the six and three months ended June 30, 2026 and 2025, and its condensed consolidated cash flows for the six months ended June 30, 2026 and 2025, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.
Consolidation, Policy [Policy Text Block]
 

b)

Principles of consolidation

 

The unaudited condensed consolidated interim financial statements include the accounts of all the subsidiaries and VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation.
Use of Estimates, Policy [Policy Text Block]
 

c)

Use of estimates

 

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

d)

Foreign currency translation

 

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

 

   

June 30, 2026

    

December 31, 2025

  
                 

Balance sheet items, except for equity accounts

     6.8109       7.0288  
                 
   

Six Months Ended June 30,

  
   

2026

    

2025

  
                 

Items in the statements of operations and comprehensive loss

     6.8932       7.1839  
                 
   

Three Months Ended June 30,

  
   

2026

    

2025

  
                 

Items in the statements of operations and comprehensive loss

     6.8408       7.1915  

 

No representation is made that the RMB amounts could have been, or could be converted into US$ at the above rates.
Credit Loss, Financial Instrument [Policy Text Block]
 

e)

Current expected credit losses

 

The allowance for credit losses reflects the Company's current estimate of credit losses expected to be incurred over the life of the related financial assets. The allowance for credit losses is presented as a valuation account that is deducted from the amortized cost basis of financial asset(s) to present the net amount expected to be collected on the financial asset(s).

 

The Company considers various factors in establishing, monitoring, and adjusting its allowance for credit losses, including the aging and aging trends, customer/other parties’ creditworthiness and specific exposures related to particular customers/other parties. The Company also monitors other risk factors and forward-looking information, such as country specific risks and economic factors that may affect a customer/other party’s ability to pay in establishing and adjusting its allowance for credit losses. The Company assesses collectability by reviewing the financial assets on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers/other parties with known disputes or collectability issues. Accounts receivable and short-term loans to unrelated parties are written off after all collection efforts have ceased.

 

The following tables summarized the movements of the Company’s credit losses for the six and three months ended June 30, 2026 and 2025, respectively:

 

   

Six Months Ended June 30,

    

Three Months Ended June 30,

  
   

2026

    

2025

    

2026

    

2025

  
   

US$(’000)

    

US$(’000)

    

US$(’000)

    

US$(’000)

  
   

(Unaudited)

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

  

Credit loss for accounts receivable:

                                
                                 

Balance as of beginning of the period

     5,137       4,817       5,036       4,834  

Provision for/(reverse of) credit loss during the period

     (180 )     309       -       298  

Written off during the period

     -       -       -       -  

Exchange translation adjustments

     154       19       75       13  

Balance as of end of the period

     5,111       5,145       5,111       5,145  

 

   

Six Months Ended June 30,

    

Three Months Ended June 30,

  
   

2026

    

2025

    

2026

    

2025

  
   

US$(’000)

    

US$(’000)

    

US$(’000)

    

US$(’000)

  
   

(Unaudited)

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

  

Credit loss for other current assets:

                                
                                 

Balance as of beginning of the period

     1,989       1,513       1,983       1,889  

Provision for/(reverse of) credit loss during the period

     3       377       8       1  

Exchange translation adjustments

     (1 )     -       -       -  

Balance as of end of the period

     1,991       1,890       1,991       1,890  
Revenue from Contract with Customer [Policy Text Block]
 

f)

Revenue recognition

 

The following table present the Company’s revenues disaggregated by products and services and timing of revenue recognition:

 

   

Six Months Ended June 30,

    

Three Months Ended June 30,

  
   

2026

    

2025

    

2026

    

2025

  
   

US$(’000)

    

US$(’000)

    

US$(’000)

    

US$(’000)

  
   

(Unaudited)

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

  
                                 

Internet advertising and related services

                                

--distribution of the right to use search engine marketing service

     -       49       -       -  

-- Internet advertising and related data service

     826       1,439       542       469  

Blockchain-based SaaS services

     -       615       -       -  

AI Service

     95       -       57          

IP Services

     114       97       53       79  

Total revenues

   $ 1,035     $ 2,200     $ 652     $ 548  

 

   

Six Months Ended June 30,

    

Three Months Ended June 30,

  
   

2026

    

2025

    

2026

    

2025

  
   

US$(’000)

    

US$(’000)

    

US$(’000)

    

US$(’000)

  
   

(Unaudited)

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

  
                                 

Revenue recognized over time

     114       146       53       79  

Revenue recognized at a point in time

     921       2,054       599       469  

Total revenues

   $ 1,035     $ 2,200     $ 652     $ 548  

 

For the six and three months ended June 30, 2026 and 2025, there were no revenue recognized from performance obligations that were satisfied in prior periods.
Business Combination [Policy Text Block]
 

g)

Asset acquisition of Rahula Group

 

Acquisitions that do not meet the definition of a business under ASC 805 are accounted for as an asset acquisition, utilizing a cost accumulation model. Assets acquired and liabilities assumed are recognized at cost, which is the consideration the acquirer transfers to the seller, including direct transaction costs, on the acquisition date. The cost of the acquisition is then allocated to the assets acquired based on their relative fair values. Goodwill is not recognized in an asset acquisition. Direct transaction costs include those third-party costs that can be directly attributable to the asset acquisition and would not have been incurred absent the acquisition transaction.

 

Acquisition of Rahula Digital Media (HK) Limited.

 

On March 7, 2025, ChinaNet Investment Holding Limited (the “Purchaser”), a British Virgin Islands company and an indirect wholly-owned subsidiary of ZW Data Action Technologies Inc. acquired the 10,000 shares of Rahula Digital Media (HK) Limited, a Hong Kong company (the "Rahula") that Vickie Chan, an individual (the “Seller”) owned, pursuant to that certain Share Sale and Purchase Agreement, dated March 3, 2025, entered into by and between the Purchaser and the Seller for a total consideration of US$0.6 million. Rahula owns 100% equity interest in Shenzhen Shangye Business Consulting Services Co., Ltd., a People’s Republic of China company (together as “Rahula Group”). Rahula Group is principally engaged in the development and monetization of intellectual property rights on agent management, marketing data management, targeted marketing and mass marketing systems and technologies.

 

The Company determined this transaction represented an asset acquisition as substantially all of the value was in the intellectual property intangible assets of Rahula Group.

 

The acquisition method of accounting includes the establishment of a net deferred tax asset or liability resulting from book tax basis differences related to assets acquired and liabilities assumed on the date of acquisition. When an acquisition of a group of assets is purchased in a transaction that is not accounted for as a business combination under ASC 805, “Business Combinations”, a difference between the book and tax bases of the assets arises. ASC 740, “Income Taxes,” requires the use of simultaneous equations to determine the assigned value of the asset and the related deferred tax asset or liability. As goodwill is not recognized in an asset acquisition, recognizing deferred tax assets or liabilities for temporary differences in an asset acquisition results in adjusting the carrying amount of the acquired assets and liabilities.

 

On March 7, 2025, upon the Purchaser’s acquisition of the outstanding common stock of Rahula, the Rahula intangible asset balance recorded on the acquisition date and included in intangible assets was as follows:

 

   

As of March 7, 2025

  
   

US$(’000)

  
   

(Unaudited)

  

Rahula Group intangible asset recorded on acquisition date:

        

Intangible asset acquired (a)

     707  

Deferred tax liability generated from the Rahula asset

     (107 )

Total consideration paid

     600  

 

 

(a)

This intangible asset balance will be amortized over the remaining useful life of 3 years as of the March 7, 2025 acquisition date.
Lessee, Leases [Policy Text Block]
 

h)

Lease

 

As of June 30, 2026, operating lease right-of-use assets and total operating lease liabilities recognized was approximately US$0.02 million and US$0.03 million, respectively.

 

Maturity of operating lease liabilities

 

   

Operating leases

  
   

US$(’000)

  
   

(Unaudited)

  
         

Six months ending December 31, 2026

     25  

Total undiscounted lease payments

     25  

Less: imputed interest

     -  

Total operating lease liabilities as of June 30, 2026

     25  
         

Including:

        

Operating lease liabilities

     25  

Operating lease liabilities-Non current

     -  
      25  

 

Operating lease expenses:

 

   

Six Months Ended June 30,

    

Three Months Ended June 30,

  
   

2026

    

2025

    

2026

    

2025

  
   

US$(’000)

    

US$(’000)

    

US$(’000)

    

US$(’000)

  
   

(Unaudited)

    

(Unaudited)

    

(Unaudited)

    

(Unaudited)

  
                                 

Long-term operating lease contracts

     25       25       13       13  

Short-term operating lease contracts

     -       2       -       1  

Total

   $ 25     $ 27     $ 13     $ 14  

 

Supplemental information related to operating leases:

 

   

Six Months Ended June 30,

 
   

2026

    

2025

  
   

US$(’000)

    

US$(’000)

  
   

(Unaudited)

    

(Unaudited)

  
                 

Operating cash flows used for operating leases (US$’000)

     21       23  

Right-of-use assets obtained in exchange for new lease liabilities (US$’000)

     -       86  

Weighted-average remaining lease term (years)

     0.5       1.5  

Weighted-average discount rate

     6 %     6 %