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			June 30, 2020			September 30, 2020 #		December 31, 2019			June 30, 2020			September 30, 2020

Stock price	$	1.17		$	1.00				$	1.17		$	1.00		$	2.02
Years to maturity		0.55			0.05					1.05			0.55			0.30
Risk-free interest rate		1.58	%		0.19	%				1.57	%		0.18	%		0.13	%
Dividend yield		-			-					-			-			-
Expected volatility		60	%		143	%				80	%		112	%		133	%
Exercise Price *	$	1.4927		$	1.4927				$	1.4927		$	1.4927		$	1.4927

Fair value of the warrant	$	0.11		$	0.02		$	-	$	0.28		$	0.20		$	0.80

Warrant Liabilities (US$'000)	$	71		$	13		$	-	$	36		$	26		$	103

	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

Warrant Liabilities (US$'000)	$	503		$	32		$	200		$	103		$	103		$	55

* 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.

# The investor warrants had expired during the

three

months ended

September 30, 2020.

Changes in fair value of warrant liabilities

Nine and Three Months Ended

September 30, 2020 (

Unaudited)

	As of	As of	As of	Change in Fair Value (gain)/loss
	September 30, 2020	June 30, 2020	December 31, 2019	Nine Months Ended September 30, 2020		Three Months Ended September 30, 2020
Fair value of the Warrants:
Investor warrants	-	13	71	(71	)	(13	)
Placement agent warrants	103	26	36	67		77
Warrant liabilities	103	39	107	(4	)	64

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

Warrants issued and outstanding as of

September 30, 2020

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, 2020		774,000		0.63	$	1.4927		774,000		0.63	$	1.4927
Granted/Vested		-						-
Expired		(645,000	)					(645,000	)
Exercised		-						-
Balance, September 30, 2020 (Unaudited)		129,000		0.13	$	1.4927		129,000		0.13	$	1.4927