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WARRANTS
 3 Months Ended
Mar. 31, 2012
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
11. WARRANTS

 

On April 21, 2010, the Company issued to Anderson & Strudwick Incorporated (“A&S”) 150,000 warrants, as a portion of the placement commission for the IPO. On the same day, the Company granted a total of 7,500 warrants to Hawk Associates Inc.(“Hawks”), the Company’s investor relations consultancy. On January 10, 2012, the Company issued 100,000 warrants to Firs Trust Group, Inc., (“Firs Trust”), the Company’s investor relations consultancy. The Company had 257,500 warrants outstanding as of March 31, 2012. All the warrants issued to “A&S” have the right to purchase one share of common stock for an exercise price of $10.00 per share with a term of 5 years. All the warrants granted to Hawks have the right to purchase one share of common stock for an exercise price of $9.60 per share with a term of 5 years. All the warrants granted to Firs Trust have the right to purchase one share of common stock for an exercise price of $4.00 per share with a term of 5 years.

 

The fair values of the outstanding warrants at March 31, 2012 were calculated using the Black Scholes Model with the following assumptions:

 

Market price per share (USD/share)     2.34  
Exercise price (USD/share)     4.00 to 10.00  
Risk free rate     1.04%, 0.51%  
Dividend yield     -  
Expected term/Contractual life (years)     3.06 to 4.78  
Expected volatility     136.4 %

 

The following table sets forth by level within the fair value hierarchy of our financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2012 and December 31, 2011, respectively.

 

    Carrying Value at
March, 2012		     Fair Value Measurement at
March 31, 2012		  
          Level 1     Level 2     Level 3  
Warrants liability   $ 295,977     $ -     $ 295,977     $ -  

 

The following is a reconciliation of the beginning and ending balances of warrants liability measured at fair value on a recurring basis using Level 2 inputs:

 

    March 31,
2012		     December 31,
2011		  
    US$     US$  
Beginning balance     96,469       318,109  
Warrants issued     -       -  
Fair value change of the issued warrants included in earnings     199,508       (221,640 )
Ending balance     295,977       96,469  

 

Following is a summary of the warrants activity:

    Number     Weighted
Average
Exercise Price		     Weighted Average
Remaining
Contractual Life		  
Outstanding as of December 31, 2011     157,500     $ 9.98       3.31  
Granted     100,000                  
Forfeited     -                  
Exercised     -                  
Outstanding as of March 31, 2012     257,500     $ 7.66       3.73