WARRANTS

12 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

14.

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. (“Hawk”), the Company’s investor relations consultancy. On January 10, 2012, the Company issued 100,000 warrants to FirsTrust Group, Inc., (“FirsTrust”), the Company’s financial advisor. There were a total of 257,500 warrants issued and outstanding as of December 31, 2013. 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 Hawk 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 FirsTrust 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 value of the outstanding warrants at December 31, 2013 was calculated using the Black Scholes Model with the following assumptions:

Market price per share (USD/share)	3.88
Exercise price (USD/share)	$4.00, $9.60, $10.00
Risk free rate	0.78%, 0.13%, 0.13	%
Dividend yield	-
Expected term/Contractual life (years)	3.02, 1.30, 1.30
Expected volatility	203.20	%

The following table sets forth by level within the fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2013, 2012 and 2011.

	Carrying Value at		Fair Value Measurement at
	December 31,2013		December 31,2013
			Level 1		Level 2		Level 3
Warrants liability	$	720,857	$	-	$	720,857	$	-

	Carrying Value at		Fair Value Measurement at
	December 31,2012		December 31,2012
			Level 1		Level 2		Level 3
Warrants liability	$	374,166	$	-	$	374,166	$	-

	Carrying Value at		Fair Value Measurement at
	December 31,2011		December 31,2011
				Level 1		Level 2		Level 3
Warrants liability	$	96,469	$	-	$	96,469	$	-

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:

	December 31,
	2013	2012	2011
	US$	US$	US$
Beginning balance	374,166	96,469	318,109
Warrants issued		97,505	-
Fair value change of the issued warrants included in earnings	346,691	180,192	(221,640)
Ending balance	720,857	374,166	96,469

Following is a summary of the warrants activity:

		Weighted		Weighted Average
		Average		Remaining
	Number	Exercise Price		Contractual Life
Outstanding as of January 1, 2011	157,500	$
Granted	-
Forfeited	-
Exercised	-
Outstanding as of January 1, 2012	157,500	$	9.98	3.31
Granted	100,000
Forfeited	-
Exercised	-
Outstanding as of December 31, 2012	257,500	$	7.66	2.97
Granted	-
Forfeited	-
Exercised	-
Outstanding as of December 31, 2013	257,500	$	7.66	1.97

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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