17.	Warrant liabilities

The Company consummated a registered direct offering in

January 2018 (

the

“2018

Financing”), as part of the transaction, the Company issued to the investors and the placement agent warrants to purchase up to

645,000

shares and

129,000

shares of the Company's common stock at an exercise price of

$6.60

per share, respectively. The Company accounted for these warrants as derivative liabilities. As a result, these warrants were remeasured at fair value as of each reporting date with changes in fair value be recorded in earnings in each reporting period.

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, 2019			March 31, 2020			June 30, 2020			December 31, 2019			March 31, 2020			June 30, 2020

Stock price	$	1.17		$	0.95		$	1.00		$	1.17		$	0.95		$	1.00
Years to maturity		0.55			0.30			0.05			1.05			0.80			0.55
Risk-free interest rate		1.58	%		0.10	%		0.19	%		1.57	%		0.13	%		0.18	%
Dividend yield		-			-			-			-			-			-
Expected volatility		60	%		99	%		143	%		80	%		78	%		112	%
Exercise Price *	$	1.4927		$	1.4927		$	1.4927		$	1.4927		$	1.4927		$	1.4927

Fair value of the warrant	$	0.11		$	0.07		$	0.02		$	0.28		$	0.12		$	0.20

Warrant Liabilities (US$'000)	$	71		$	45		$	13		$	36		$	16		$	26

	Investors warrants									Placement agent warrants
	December 31, 2018			March 31, 2019			June 30, 2019			December 31, 2018			March 31, 2019			June 30, 2019

Stock price	$	1.34		$	1.95		$	1.35		$	1.34		$	1.95		$	1.35
Years to maturity		1.55			1.30			1.05			2.05			1.80			1.55
Risk-free interest rate		2.50	%		2.27	%		1.73	%		2.50	%		2.27	%		1.73	%
Dividend yield		-			-			-			-			-			-
Expected volatility		199	%		216	%		90	%		176	%		187	%		202	%
Exercise Price	$	6.60		$	6.60		$	6.60		$	6.60		$	6.60		$	6.60

Fair value of the warrant	$	0.78		$	1.23		$	0.05		$	0.80		$	1.26		$	0.80

Warrant Liabilities (US$'000)	$	503		$	793		$	32		$	103		$	163		$	103

* On

September 25, 2019,

as a result of the close on the

first

half of a private placement with a selected group of investors, the exercise price of the warrants issued in the

2018

Financing that contain the “full ratchet” price protection in the event of subsequent issuances below the applicable exercise price (the “Down round feature”) was adjusted to

$1.4927.

Changes in fair value of warrant liabilities

Six and Three Months Ended

June 30, 2020 (

Unaudited)

							Change in Fair Value (gain)/loss
	As of June 30, 2020		As of March 31, 2020		As of December 31, 2019		Six Months Ended June 30, 2020			Three Months Ended June 30, 2020
Fair value of the Warrants:
Investor warrants		13		45		71		(58	)		(32	)
Placement agent warrants		26		16		36		(10	)		10
Warrant liabilities		39		61		107		(68	)		(22	)

Six and Three Months Ended

June 30, 2019 (

Unaudited)

							Change in Fair Value (gain)/loss
	As of June 30, 2019		As of March 31, 2019		As of December 31, 2018		Six Months Ended June 30, 2019			Three Months Ended June 30, 2019
Fair value of the Warrants:
Investor warrants		32		793		503		(471	)		(761	)
Placement agent warrants		103		163		103		-			(60	)
Warrant liabilities		135		956		606		(471	)		(821	)

Warrants issued and outstanding as of

June 30, 2020

and their movements during the

six

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, 2020		774,000		0.63	$	1.4927		774,000		0.63	$	1.4927
Granted/Vested		-						-
Expired		-						-
Exercised		-						-
Balance, June 30, 2020 (Unaudited)		774,000		0.13	$	1.4927		774,000		0.13	$	1.4927