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Warrants | 12 Months Ended
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Dec. 31, 2020
Warrants [Abstract] |
WARRANTS |
| 14. | WARRANTS
On April 28, 2016, the Company signed Share Purchase Agreement (“SPA”) with Hangzhou Lianluo. In this SPA, Hangzhou Lianluo is entitled with 125,000 warrants to acquire from the Company 125,000 common shares at purchase price of $17.60 per share. The warrants will be exercisable at any time. The Company recognized the warrants as a derivative liability because warrants can be settled in cash. Warrants are remeasured at fair value with changes in fair value recorded in earnings in each reporting period. There was a total of 125,000 warrants issued and outstanding as of December 31, 2020 and 2019. The fair value of the outstanding warrants was calculated using the Black Scholes Model with the following assumptions:
|  | December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Market price per share (USD/share) |  | $ | 4.15 |  |  | $ | 3.12 |  |  |  | 9.04 |
Exercise price (USD/share) |  |  | 17.60 |  |  |  | 17.60 |  |  |  | 17.60 |
Risk free rate |  |  | 0.41 | % |  |  | 1.81 | % |  |  | 2.60 | %
Dividend yield |  |  | 0 | % |  |  | 0 | % |  |  | 0 | %
Expected term/Contractual life (years) |  |  | 5.3 |  |  |  | 6.3 |  |  |  | 7.3 |
Expected volatility |  |  | 341.88 | % |  |  | 279.93 | % |  |  | 256.20 | %
The following is a reconciliation of the beginning and ending balances of warrants liability measured at fair value on a recurring basis using Level 3 inputs:
|  | December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018- |
Beginning balance |  | $ | 389,630 |  |  | $ | 1,129,246 |  |  | $ | 1,729,111 |
Warrants issued to Hangzhou Lianluo |  |  | - |  |  |  | - |  |  |  | - |
Warrants redeemed |  |  | - |  |  |  | - |  |  |  | - |
Fair value change of the issued warrants included in earnings |  |  | 129,036 |  |  |  | (739,616 | ) |  |  | (599,865 | )
Ending balance |  | $ | 518,666 |  |  | $ | 389,630 |  |  |  | 1,129,246 |
The following is a summary of the warrants activity:
|  | Number |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Years) |
Outstanding as of January 1, 2019 |  |  | 125,000 |  |  | $ | 17.60 |  |  |  |  |
Granted |  |  | - |  |  |  |  |  |  |  |  |
Forfeited |  |  | - |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  |  |  |  |  |  |
Redeemed |  |  | - |  |  |  |  |  |  |  |  |
Outstanding as of December 31, 2019 |  |  | 125,000 |  |  | $ | 17.60 |  |  |  |  |
Granted |  |  | - |  |  |  |  |  |  |  |  |
Forfeited |  |  | - |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  |  |  |  |  |  |
Redeemed |  |  | - |  |  |  |  |  |  |  |  |
Outstanding as of December 31, 2020 |  |  | 125,000 |  |  | $ | 17.60 |  |  |  |  |
From February to March 2020, the Company consummated three registered direct offerings of 1,373,750 Class A Common Shares and concurrent private placements of warrants to purchase up to 1,373,750 Class A Common Shares with three investors. In late January 2021, 1,255,000 of these warrants were exercised and leaving 118,750 warrants that remain outstanding.
Amount of Underlying Class A Common Shares |  |  | 118,750 |
Exercise price |  | $ | 5.60 |
Floor Price |  | $ | 1.44 |
Expiration Date |  |  | September 2, 2025 |
Issuance Date |  |  | March 2, 2020 |
In accordance with ASC 815-40, the Company accounted for the Warrants as equity instruments.

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