WARRANTS

12 Months Ended

Dec. 31, 2014

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.

In connection with the stock offering in February, 2014, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional investors for the sale of 734,700 common shares in a registered offering at the price of $9.12 per common share. In addition, the Company issued 220,410 warrants to the institutional investors aggregately and issued 73,470 warrants to FT Global Capital, Inc. (“FT Global”), as a portion of the placement commission. These warrants will be exercisable immediately as of the date of issuance at an exercise price of $11.86 per common share and expire forty-two months from the date of issuance.

There were a total of 551,380 warrants issued and outstanding as of December 31, 2014. 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. All the warrants granted to the certain institutional investors have the right to purchase one share of common stock for an exercise price of $11.86 per share with a term of 3.5 years. All the warrants granted to the FT Global Capital, Inc. have the right to purchase one share of common stock for an exercise price of $11.86 per share with a term of 3.5 years.

The fair value of the outstanding warrants at December 31, 2014 was calculated using the Black Scholes Model with the following assumptions:

Market price per share (USD/share)		2.73
Exercise price (USD/share)		$4.00 - $11.86
Risk free rate		0.06% - 1.00%
Dividend yield		-
Expected term/Contractual life (years)		0.30 - 2.64
Expected volatility		27.57% - 140.19%

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 December 31, 2014, 2013 and 2012:

	Carrying Value at		Fair Value Measurement at
	December 31,2014		December 31,2014
			Level 1		Level 2		Level 3
Warrants liability	$	553,060	$	-	$	553,060	$	-

	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	$	-

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,
	2014		2013		2012
	US$		US$		US$
Beginning balance		720,857		374,166		96,469
Warrants issued		2,698,375		-		97,505
Fair value change of the issued warrants included in earnings		(2,866,172)		346,691		180,192
Ending balance		553,060		720,857		374,166

Following is a summary of the warrants activity:

			Weighted		Weighted Average
			Average		Remaining
	Number		Exercise Price		Contractual Life
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
Granted		293,880
Forfeited		-
Exercised		-
Outstanding as of December 31, 2014		551,380	$	9.9	1.86

- 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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