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Stockholders' Equity
3 Months Ended
Mar. 31, 2018
Stockholders' Equity [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 13 – STOCKHOLDERS’ EQUITY

 

Common stock issued for services

 

In January 2018, the Company has issued 249,870 shares as bonus to certain directors and employees for performance targets to be achieved for the year in 2018. These shares were valued at 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, during the three months ended March 31, 2018, the Company recorded stock-based compensation expense of $0 and prepaid expenses of $819,212 which will be amortized over the remaining service period. 

 

From January 1, 2018 to March 31, 2018, pursuant to consulting agreements, the Company issued an aggregate of 1,223,269 shares of common stock to 54 consultants for the services rendered and to be rendered. These shares were valued at the fair market value on the grant date using the reported closing share price on the date of grant. During the three months ended March 31, 2018, in connection with the issuance of these shares, the Company recorded prepaid expense expenses of $6,228,976 which is being amortized over the respective service period. 

 

Additionally, pursuant to these consulting agreements, the Company issued/will issue an additional 747,563 share of common stock to these consultants as follows: 574,658 shares between April 2018 and December 2018; 172,905 shares during year 2019, provided that these agreements are not terminated prior to the issuance of such shares. The initial fair value of these shares was 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. As of March 31, 2018, there was $411,685 of unvested stock-based consulting fees to be recognized over the remaining service periods. 

 

For the three months ended March 31, 2018, in connection with the above share issuances and the amortization of prepaid stock-based consulting fees from shares issued in 2017, the Company recorded stock-based consulting fees of $1,643,047.

 

For part of the consultancy agreements, if, on the first date when the restrictive legend on the certificate of each lot of the shares issued to the Consultant pursuant these agreements are 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 Consultants 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 total maximum number of shares issued for the Shortfall of these consultancy agreements shall not exceed 173,770 Shares.

 

Additionally, pursuant to a two-year consulting agreement between the Company’s wholly-owned subsidiary, EC Advertising and an individual, the Company shall, within one month from the date of this Agreement (October 9, 2017), issue such number of ordinary shares of EC Advertising to the Consultant (or his nominee) so that he (or his nominee) will hold 15% of EC Advertising 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 shall issue, or shall cause its major shareholder to transfer, such number of EC Advertising'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’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. 

Common stock sold for cash

 

In March 2018, pursuant to a stock purchase agreement, the Company sold 69,676 shares of common stock to an investor at a purchase price of $3.68 per share for net cash proceeds a total of $256,410. The Company did not engage a placement agent with respect to these sales.

 

Common stock issued debt conversion

 

In January 2018, the Company issued 200,100 shares of its common stock upon conversion of debt (see Note 11).

 

Common stock issued in connection with acquisitions

 

On January 19, 2018 (the “Closing Date”), the Company completed the acquisition of 60% of the issued and outstanding capital stock of 3D Discovery from its shareholders pursuant to the terms and conditions of a Sale and Purchase Agreement entered into among the Company and the 3D Discovery Stockholders on the Closing Date. In connection with the acquisition, the Company issued 68,610 unregistered shares of its common stock valued at $442,535, based on the acquisition-date fair value of our common stock of $6.45 per share based on the quoted market price of the Company’s common stock on the Closing date (See Note 2).

 

On January 30, 2018 (the “Closing Date”), the Company completed the acquisition of 80% of the issued and outstanding capital stock of AnyWorkspace from its shareholders pursuant to the terms and conditions of a Sale and Purchase Agreement entered into among the Company and the AnyWorkspace Stockholders on the Closing Date. In connection with the acquisition, the Company issued 106,464 unregistered shares of its common stock valued at $534,449, based on the acquisition-date fair value of our common stock of $5.02 per share based on the quoted market price of the Company’s common stock on the Closing date (See Note 2).