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Subsequent Events
9 Months Ended
Sep. 30, 2017
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 19 – SUBSEQUENT EVENTS

 

Common stock issued for services

 

On October 3, 2017, pursuant to a two-year consulting agreement between the Company’s wholly-owned subsidiary, EC Manpower Limited and an individual for investor relation services to be rendered, the Company agreed to pay this consultant $202,000 per year to be paid by the issuance of an aggregate of 134,688 shares as follows: 33,672 shares were issued in October 2017. 33,672 during the sixth month from the agreement date, 33,672 shares during the 12th month from the agreement date, and 33,672 shares during the 18th month from the agreement date. The initial 33,672 shares were valued at $112,801, or $3.35 per share, the fair market value on the grant date using the reported closing share price on the date of grant. In connection with the issuance of these shares, the Company shall record stock-based professional fees of $112,801 over the service period. Additionally, pursuant to this consulting agreement, the Company will issue an additional 101,016 share of common stock to this consultant as outlined above, provided that this Agreement is not terminated prior to date of the issuance of these shares. The initial fair value of these shares were valued at the fair market value on the contract date using the reported closing share price on the date of grant. The Company will recognize stock-based professional fees over the period during which the services are rendered by such consultant. At the end of each financial reporting period prior to issuance of these shares, the fair value of these shares is remeasured using the then-current fair value of the Company’s common stock. If, on the first date when the restrictive legend on the certificate of each lot of the Shares issued to the Consultant pursuant this agreement is removed and such lot of Shares becomes freely tradeable in the NASDAQ Capital Market without restriction, the closing price of the shares drops below the issue price, the Company will compensate the Consultant for the drop in value of such lot of shares, which will be calculated by multiplying the number of shares by the difference between the closing price and the issue price ("Shortfall"). The Company will pay for the Shortfall annually by causing the Company to issue shares at the average closing price of the 5 trading days immediately before the first and second anniversary date of the date of this agreement, provided that the maximum number of shares issued for the Shortfall shall not exceed 13,500 Shares per year of services.

 

On October 9, 2017, pursuant to a two-year consulting agreement between the Company’s wholly-owned subsidiary, EC Advertising Limited and an individual, the Company issued 65,089 shares of common stock to a consultant for advertising and marketing services to be rendered. These shares were valued at $216,095, or $3.32 per share, the fair market value on the grant date using the reported closing share price on the date of grant. In connection with the issuance of these shares, the Company shall record stock-based professional fees of $216,095 over the service period. Additionally, pursuant to this consulting agreement, the Company will issue an additional 65,089 share of common stock to this consultant before April 9, 2018, provided that this Agreement is not terminated prior to date of the issuance of these shares. The initial fair value of these shares were valued at the fair market value on the contract date using the reported closing share price on the date of grant. The Company will recognize stock-based professional fees over the period during which the services are rendered by such consultant. At the end of each financial reporting period prior to issuance of these shares, the fair value of these shares is remeasured using the then-current fair value of the Company’s common stock. If, on the first date when the restrictive legend on the certificate of each lot of the shares issued to the Consultant pursuant this agreement is removed and such lot of shares becomes freely tradeable in the NASDAQ Capital Market without restriction, the closing price of the shares drops below the issue price, the Company will compensate the Consultant for the drop in value of such lot of shares, which will be calculated by multiplying the number of Shares by the difference between the closing price and the issue price ("Shortfall"). The Company will pay for all the Shortfalls, within the first 3 months of the second year of Services, by causing the Company to issue shares at the average closing price of the 5 trading days immediately before the shares are issued pursuant to this agreement, provided that the maximum number of shares issued for the Shortfall shall not exceed 26,036 Shares. Additionally, the Company shall, within one month from the date of this Agreement, issue such number of ordinary shares of EC Advertising Limited to the Consultant (or his nominee) so that he (or his nominee) will hold 15% of EC Advertising Limited issued share capital as enlarged by the share issue pursuant to this agreement. Additionally, within one month after the Consultant achieves all the performance targets as outlined in the agreement, EC Advertising Limited shall issue, or shall cause its major shareholder to transfer, such number of EC Advertising Limited's ordinary shares to the Consultant (or its nominee) so that he (and his nominee) will, together with the 15% issued share capital discussed above, hold a total of 49% of EC Advertising Limited’s issued share capital as enlarged by the share issue or after the transfer (as the case may be). Performance targets include the achievement by the Company of total revenue of $10,000,000 and profit after tax of $4,000,000 during the term of the agreement.

 

On October 9, 2017, pursuant to a consulting agreement, the Company agreed to issue 7,615 shares of its common stock to an entity for development services rendered. Such shares were issued in November 2017 upon completion of the services rendered. These shares were valued at $25,282, or $3.32 per share, the fair market value on the grant date using the reported closing share price on the date of grant. In connection with the issuance of these shares, the Company shall record stock-based professional fees of $25,282.

 

On October 19, 2017, pursuant to a one-year consulting agreement effective May 16, 2017, the Company issued 20,000 shares of common stock to a consultant for business development services rendered and to be rendered (see note 13). These shares were valued at $99,400, or $4.97 per share, the fair market value on the issue date using the reported closing share price on the date of issue. The initial fair value of these shares were valued at the fair market value on the contract date using the reported closing share price on the date of grant. At the end of each financial reporting period prior to issuance of these shares, the fair value of these shares were remeasured using the then-current fair value of the Company’s common stock. The Company recognizes stock-based professional fees over the period during which the services are rendered by such consultant.

 

On October 23, 2017, pursuant to a consulting agreement, the Company agreed to issue 6,000 shares of its common stock to an entity for public relations services rendered. These shares were valued at $28,920, or $4.82 per share, the fair market value on the grant date using the reported closing share price on the date of grant. In connection with the issuance of these shares, the Company shall record stock-based professional fees of $28,920.

 

In November 2017, pursuant to one-year consulting agreements effective July 19, 2017 (see Note 13), the Company issued an aggregate of 40,000 shares of common stock to two consultants (20,000 shares each) for business development services to be rendered. The initial fair value of these shares was were valued at the fair market value on the contract date using the reported closing share price on the date of grant. The Company will recognize stock-based professional fees over the period during which the services are rendered by such consultant. At the end of each financial reporting period prior to issuance of these shares, the fair value of these shares were remeasured using the then-current fair value of the Company’s common stock.

 

On November 1, 2017, pursuant to one-year consulting agreements effective November 1, 2017, the Company issued an aggregate of 100,000 shares of common stock to two entities (50,000 shares each) for business development services to be rendered. These shares were valued at $435,000, or $4.35 per share, the fair market value on the grant date using the reported closing share price on the date of grant. In connection with the issuance of these shares, the Company shall record stock-based professional fees of $435,000 over the service period. Additionally, pursuant to these consulting agreements, the Company will issue an additional 24,052 share of common stock to these consultants (12,000 and 12,052 shares, respectively) during the 6th month of this agreement, provided that these agreements are not terminated prior to the issuance of such shares. The initial fair value of these shares was were valued at the fair market value on the contract date using the reported closing share price on the date of grant. The Company will recognize stock-based professional fees over the period during which the services are rendered by such consultant. At the end of each financial reporting period prior to issuance of these shares, the fair value of these shares is remeasured using the then-current fair value of the Company’s common stock.

 

On November 1, 2017, pursuant to one-year consulting agreements effective November 1, 2017, the Company issued an aggregate of 58,000 shares of common stock to two individuals (38,000 and 20,000 shares, respectively) for business development services to be rendered. These shares were valued at $252,300, or $4.35 per share, the fair market value on the grant date using the reported closing share price on the date of grant. In connection with the issuance of these shares, the Company shall record stock-based professional fees of $252,300 over the service period. Additionally, pursuant to these consulting agreements, the Company will issue an additional 17,948 share of common stock to these consultants (11,148 and 6,800 shares, respectively) during the 6th month of this agreement, provided that these agreements are not terminated prior to the issuance of such shares. The initial fair value of these shares was were valued at the fair market value on the contract date using the reported closing share price on the date of grant. The Company will recognize stock-based professional fees over the period during which the services are rendered by such consultant. At the end of each financial reporting period prior to issuance of these shares, the fair value of these shares is remeasured using the then-current fair value of the Company’s common stock.

 

On November 3, 2017, pursuant to a two-year consulting agreement effective November 6, 2017, the Company issued 33,983 shares of common stock to an individual for business development services to be rendered. These shares were valued at $144,088, or $4.24 per share, the fair market value on the grant date using the reported closing share price on the date of grant. In connection with the issuance of these shares, the Company shall record stock-based professional fees of $144,088 over the service period. Additionally, pursuant to this consulting agreement, the Company will issue an additional 33,983 share of common stock to this consultant during the 6th month of this agreement, provided that this agreement is not terminated prior to the issuance of such shares. The initial fair value of these shares was were valued at the fair market value on the contract date using the reported closing share price on the date of grant. The Company will recognize stock-based professional fees over the period during which the services are rendered by such consultant. At the end of each financial reporting period prior to issuance of these shares, the fair value of these shares is remeasured using the then-current fair value of the Company’s common stock.

 

Note purchase agreement

 

On October 9, 2017, the Company entered into a Note Purchase Agreement (the “NPA”) with Chong Ou Holdings Group Company Limited, a BVI company (the “Investor”) pursuant to which the Investor purchased a note for $670,000, bearing two percent (2%) interest per annum (the “Note”). The Note automatically converts into shares of common stock of the Company at a conversion price equal to $3.35 per share on January 8, 2018. The Company shall have the option, in its sole and absolute discretion, to repay the Outstanding Amount in full on or before the Conversion Date.

 

Acquisition of Inspirit Studio

 

On October 27, 2017, the Company’s wholly-owned subsidiary, EC Technology & Innovations Limited (“ECTI”), entered into a Sale and Purchase Agreement (the “Agreement”) with the shareholder of Inspirit Studio (“Inspirit”), to acquire 51% ownership of Inspirit. ECTI will acquire 51% of Inspirit for consideration of HK$3.0 million, which shall be satisfied by the allotment and issuance of 85,473 shares of the Company. In connection with the acquisition, the Company shall issue 85,473 restricted shares of its common stock valued at $4.30 per share on the acquisition-date fair value of our common stock based on the quoted trading price of the Company’s common stock. Inspirit has been engaging in developing a mobile app platform which provides instant errand services in a peer to peer model. The Company is currently analyzing the fair value of the assets acquired and liabilities assumed to determine the purchase price allocation.