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Note 29 - Share-based Compensation Expenses
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
29.
 Share-based compensation expenses
 
The Company granted
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,
2016
and
2015.
These shares were valued at
US$
3.00
per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation expense recognized for the service was
US
$60,000
for the years ended
December
31,
2016
and
2015,
respectively.
 
The Company granted
140,000
shares of the Company’s 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$3.93
per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation expense recognized for the years ended
December
31,
2016
and
2015
was approximately
US$276,000
and
US$183,000,
respectively.
 
On
December
30,
2014,
the Company issued
1,680,000
shares of the Company’s restricted common stock to its executive officers, of which
613,334
restricted shares were vested upon issuance,
533,333
restricted shares were vested on
December
30,
2015
and the remaining
533,333
restricted shares were vested on
December
30,
2016.
The restricted stock was valued at
US$2.93
per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation expenses recognized was
US$
1,560,000
for the years ended
December
31,
2016
and
2015,
respectively.
 
On
September
14,
2015,
under its
2015
Omnibus Securities and Incentive Plan, the Company granted its employees in the aggregate of
266,238
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
US$2.10
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 expenses recognized for the years ended
December
31,
2016
and
2015
was approximately
US$177,000
and
US$53,000,
respectively.
 
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, in the aggregate, to purchase up to
477,240
shares of the Company’s restricted common stock at an exercise price of
US$2.10
per share, of which
159,080
options were vested upon the date of grant,
159,080
options were vested on
September
14,
2016
and the remaining
159,080
options will be vested on
September
14,
2017.
These options were valuated at
US$1.03
-
US$1.39
per option. 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 years ended
December
31,
2016
and
2015
was approximately
US$201,000
and
US$229,000,
respectively.
 
The Company granted
120,000
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.
These shares were valued at
US$1.68
per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation expense recognized for the year ended
December
31,
2015
was approximately
US$117,000.
 
On
October
9,
2015,
the Company granted
24,000
shares of the Company’s restricted common stock to a management consulting service provider in exchange for its services provided to the Company. These shares were valued at
US$2.25
per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation expense recognized for the year ended
December
31,
2015
was approximately
US$54,000.
 
On
April
1,
2016,
the Company granted
16,000
shares of the Company’s restricted common stock in aggregate to
two
marketing service providers in exchange for their services to the Company for a
12
-month period commencing on
April
1,
2016.
These shares were valued at
US$1.73
per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation expense recognized for the year ended
December
31,
2016
was approximately
US$21,000.
 
On
November
14,
2016,
the Company granted
12,000
shares of the Company’s restricted common stock to a financial advisory service provider as compensation for its services provided, which shares were subsequently issued in
March
2017.
These shares were valued at
US$1.20
per share, the closing bid price of the Company’s common stock on the date of grant. Total compensation expense recognized for the year ended
December
31,
2016
was approximately
US$14,000.
 
The Company estimated the fair value of the options granted under its
2015
Omnibus Securities and Incentive Plan on
September
14,
2015
using the Binomial option-pricing model based on the following assumptions:
 
Applicable stock price
 
$2.10
 
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
 
$2.10
 
Value per option
$1.03
-
$1.39
 
Applicable stock price is based on the closing bid price of the Company’s common stock on the grant date, after adjustment for the restricted shares granted on the grant date. Exercise multiple is used as the estimated ratio of fair value of stock over the exercise price as at the time the option is exercised. Tenor is the contract life of the option. Yield-to-maturities in continuous compounding of the United States Government Bonds with the time-to-maturities same as the expected
tenor
of the options are adopted as the risk-free rate. Annualized historical stock price volatility of the Company from an appropriate index as at the respective grant date is deemed to be appropriate to serve as the expected volatility of the stock price of the Company and is assumed to be constant and prevailing. The dividend yield is calculated based on management’s estimate of dividends to be paid on the underlying stock. Exercise price of the option is the contractual exercise price of the option.
 
Options issued and outstanding at
December
31,
2016
and their movements for the
two
years 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    
357,976
      
6.48
     $
3.02
      
357,976
      
6.48
     $
3.02
  
Granted/Vested    
477,240
      
5
     $
2.10
      
159,080
      
5
     $
2.10
  
Forfeited    
-
      
 
      
 
      
-
      
 
      
 
  
Exercised    
-
      
 
      
 
      
-
      
 
      
 
  
Balance, December 31, 2015    
835,216
      
5.04
     $
2.49
      
517,056
      
5.24
     $
2.73
  
Granted/Vested    
-
      
 
      
 
      
159,080
      
3.70
     $
2.10
  
Forfeited    
-
      
 
      
 
      
-
      
 
      
 
  
Exercised    
-
      
 
      
 
      
-
      
 
      
 
  
Balance, December 31, 2016    
835,216
      
4.04
     $
2.49
      
676,136
      
4.11
     $
2.59
  
 
The aggregate unrecognized share-based compensation expenses as of
December
31,
2016
and
2015
is approximately
US$544,000
and
US$2,741,000,
respectively.
 
**The number of restricted common stocks, common stock purchase options and the related stock price discussed in the above paragraphs and tables for all period presented have been retroactively restated to reflect the Company’s
1
for
2.5
reverse stock split, which was effective on
August
19,
2016.