Note 28 - Share-based Compensation Expenses

9 Months Ended

Sep. 30, 2015

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

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

28. Share-based compensation expenses

The Company granted 50,000 shares and 40,000 shares of the Company’s restricted common stock to its investor relations services provider, in exchange for its services to the Company for the years ended December 31, 2015 and 2014, respectively. These shares were valued at US$1.20 per share and US$0.84 per share, the closing bid price of the Company’s common stock on the date of grant, respectively. Total compensation expense recognized for the services was US$45,000 and US$25,200 for the nine months ended September 30, 2015 and 2014, respectively. Total compensation expense recognized for the services was US$15,000 and US$8,400 for the three months ended September 30, 2015 and 2014, respectively.

The Company granted 300,000 shares of the Company’s restricted common stock to a technical service provider in exchange for its services to the Company for a 12-month period commencing on August 1, 2014, of which 150,000 restricted shares was vested on August 1, 2014, and 150,000 restricted shares were vested on February 1, 2015. These shares were valued at US$0.67 per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation expense recognized for the nine and three months ended September 30, 2015 was US$117,250 and US$16,750, respectively.

The Company granted 350,000 shares of the Company restricted common stock to a management consulting service provider in exchange for its services to the Company for a 24-month period commencing on May 1, 2015. These shares were valued at US$1.57 per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation expense recognized for the nine and three months ended September 30, 2015 was both approximately US$114,500 and US$68,700.

On December 30, 2014, the Company granted 4,200,000 shares of the Company’s restricted common stock to its executive officers, of which 1,533,333 restricted shares was vested upon issuance, 1,333,333 restricted shares will be vested on December 30, 2015 and the remaining 1,333,334 restricted shares will be vested on December 30, 2016. The restricted stock was valued at $1.17 per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation cost recognized for the nine and three months ended September 30, 2015 was US$1,170,000 and US$390,000, respectively.

On September 14, 2015, under its 2015 Omnibus Securities and Incentive Plan, the Company granted its employees and directors in the aggregate of 665,592 shares of the Company’s restricted common stock, which will be vested on the third anniversary of the date of the grant. These shares were valued at $0.84 per share, the closing bid price of the Company’s common stock on the date of grant. The Company adopted a 5% forfeiture rate for recognition of the related compensation expenses of these unvested shares, total compensation cost recognized for the nine and three months ended September 30, 2015 was approximately US$8,200.

On September 14, 2015, under its 2015 Omnibus Securities and Incentive Plan, the Company also granted 5-year common stock purchase options to its employees and directors, in the aggregate, to purchase up to 1,193,100 shares of the Company’s restricted common stock at an exercise price of US$0.84 per share, of which 397,700 options was vested upon the date of grant, 397,700 options will be vested on September 14, 2016 and the remaining 397,700 options will be vested on September 14, 2017. The Company adopted a 5% forfeiture rate for recognition of the related compensation expenses of the unvested part of options, total compensation expenses recognized for these options for the nine and three months ended September 30, 2015 was approximately US$182,500.

The Company estimated the fair value of these options using the Binomial option-pricing model based on the following assumptions:

Applicable stock price		$0.84
Exercise multiple	2	-	2.5
Tenor (years)		5.00
Risk-free interest rate		1.563%
Dividend yield		-
Expected volatility		98.63%
Exercise price of the option		$0.84
Value per option	$0.41	-	$0.56

The Company granted common stock purchase options to its management, employees and directors under its 2011 and 2015’s Omnibus Securities and Incentive Plan. Options issued and outstanding at September 30, 2015 and their movements during the nine months then ended are as follows:

	Option Outstanding						Option Exercisable
	Number of underlying shares		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number of underlying shares		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
Balance, December 31, 2014 (audited)		894,940		6.48	$	1.21		894,940		6.48	$	1.21
Granted/Vested		1,193,100		5.00	$	0.84		397,700		5.00	$	0.84
Forfeited		-						-
Exercised		-						-
Balance, September 30, 2015 (unaudited)		2,088,040		5.29	$	1.00		1,292,640		5.49	$	1.09

The aggregate unrecognized share-based compensation expenses as of September 30, 2015 and 2014 was approximately US$3,306,000 and US$9,000, respectively.