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Note 18 - Warrant Liabilities
 9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Warrants Disclosure [Text Block]
18.
 Warrant liabilities
 
On
January 17, 2018,
the Company consummated a registered direct offering of
2,150,001
shares of the Company’s common stock to certain institutional investors at a purchase price of
$5.15
per share (“the Financing”). As part of the transaction, the Company also issued to the investors and the placement agent warrants for the purchase of up to
645,000
and
129,000
shares of the Company’s common stock at an exercise price of
$6.60
per share, respectively.
 
The Company accounted for the warrants issuing in the Financing as derivative liabilities, as the strike price of the warrants is dominated in a currency (U.S. dollar) other than the functional currency of the Company (Renminbi or Yuan) and is
not
considered index to the Company’s own stock. As a result, these warrants were remeasured at fair value with changes in fair value be recorded in earnings in each reporting period.
 
On
September 25, 2019,
as a result of the close on the
first
half of a private placement with a select group of investors related the Securities Purchase Agreement entered into on
August 7, 2019,
the exercise price of the warrants issued on
January 17, 2018
that
contain “full ratchet” price protection in the event of subsequent issuances below the applicable exercise price (the “Down round feature”)
was adjusted to
$1.4927.
 
Fair value of the warrants
 
The Company used Binomial model to determine the fair value of the Warrants based on the assumptions summarized as below:
 
    Investors warrants   Placement agent warrants
    December 31,
2018		   June 30,
2019		   September 30,
2019		   December 31,
2018		   June 30,
2019		   September 30,
2019
                                                 
Stock price   $
1.34
     $
1.35
     $
1.30
     $
1.34
     $
1.35
     $
1.30
  
Years to maturity    
1.55
      
1.05
      
0.80
      
2.05
      
1.55
      
1.30
  
Risk-free interest rate    
2.50
 %    
1.73
 %    
1.79
 %    
2.50
 %    
1.73
 %    
1.57
 %
Dividend yield    
-
      
-
      
-
      
-
      
-
      
-
  
Expected volatility    
199
 %    
90
 %    
82
 %    
176
 %    
202
 %    
83
 %
Exercise Price   $
6.60
     $
6.60
     $
1.4927
     $
6.60
     $
6.60
     $
1.4927
  
                                                 
Fair value of the warrant   $
0.78
     $
0.05
     $
0.31
     $
0.80
     $
0.80
     $
0.43
  
 
    Investors warrants   Placement agent warrants
    January 17,
2018		   June 30,
2018		   September 30,
2018		   January 17,
2018		   June 30,
2018		   September 30,
2018
                                                 
Stock price   $
3.98
     $
2.52
     $
1.73
     $
3.98
     $
2.52
     $
1.73
  
Years to maturity    
2.50
      
2.05
      
1.80
      
3.00
      
2.55
      
2.30
  
Risk-free interest rate    
2.22
 %    
2.53
 %    
2.80
 %    
2.39
 %    
2.56
 %    
2.82
 %
Dividend yield    
-
      
-
      
-
      
-
      
-
      
-
  
Expected volatility    
158
 %    
174
 %    
183
 %    
147
 %    
159
 %    
166
 %
Exercise Price   $
6.60
     $
6.60
     $
6.60
     $
6.60
     $
6.60
     $
6.60
  
                                                 
Fair value of the warrant   $
2.93
     $
1.71
     $
1.06
     $
2.99
     $
1.74
     $
1.10
  
 
Changes in fair value of warrant liabilities
 
Nine and Three Months Ended
September 30, 2019 (
Unaudited)
 
    As of   As of   As of   Change in Fair Value (gain)/loss
 
 
September 30,
2019
 
June 30,
2019
 
December 31,
2018
 
 Nine Months Ended September 30, 2019
 
Three Months Ended
September 30,
2019
Fair value of the Warrants:                    
Investor warrants    
200
      
32
      
503
      
(303
 )    
168
  
Placement agent warrants    
55
      
103
      
103
      
(48
 )    
(48
 )
Warrant liabilities    
255
      
135
      
606
      
(351
 )    
120
  
 
Nine and Three Months Ended
September 30, 2018 (
Unaudited)
 
    As of
  As of
  As of
  Change in Fair Value (gain)/loss
 
 
 
September 30,
2018
 
 
 
June 30,
2018
 
 
 
January 17,
2018
 
 
 
Nine Months Ended
September 30, 2018
 
 
 
Three Months Ended
September 30, 2018
 
Fair value of the Warrants:                                        
Investor warrants    
684
      
1,103
      
1,890
      
(1,206
 )    
(419
 )
Placement agent warrants    
142
      
224
      
385
      
(243
 )    
(82
 )
Warrant liabilities    
826
      
1,327
      
2,275
      
(1,449
 )    
(501
 )
 
 
Warrants issued and outstanding as of
September 30, 2019
and their movements during the
nine
months then ended are as follows:
 
    Warrant Outstanding   Warrant 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, January 1, 2019
    
774,000
      
1.63
     $
6.60
      
774,000
      
1.63
     $
6.60
  
Granted/Vested
    
-
      
 
      
 
      
-
      
 
      
 
  
Forfeited
    
-
      
 
      
 
      
-
      
 
      
 
  
Exercised
    
-
      
 
      
 
      
-
      
 
      
 
  
Balance, September 30, 2019 (Unaudited)
    
774,000
      
0.88
     $
1.4927
      
774,000
      
0.88
     $
1.4927