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Kandi Technologies Group, Inc. – ‘10-Q’ for 6/30/13 – ‘XML.R23’

On:  Wednesday, 8/14/13, at 9:01am ET   ·   For:  6/30/13   ·   Accession #:  1062993-13-4078   ·   File #:  1-33997

Previous ‘10-Q’:  ‘10-Q’ on 5/14/13 for 3/31/13   ·   Next:  ‘10-Q’ on 11/14/13 for 9/30/13   ·   Latest:  ‘10-Q’ on 11/8/23 for 9/30/23

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/14/13  Kandi Technologies Group, Inc.    10-Q        6/30/13  177:9M                                     Newsfile Corp/FA

Quarterly Report   —   Form 10-Q   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report -- form10q                         HTML    510K 
 2: EX-31.1     Certification -- §302 - SOA'02 -- exhibit31-1       HTML     45K 
 3: EX-31.2     Certification -- §302 - SOA'02 -- exhibit31-2       HTML     45K 
 4: EX-32.1     Certification -- §906 - SOA'02 -- exhibit32-1       HTML     43K 
171: R1          Document and Entity Information                     HTML     70K  
105: R2          Condensed Consolidated Balance Sheets               HTML    195K  
98: R3          Condensed Consolidated Balance Sheets               HTML     58K 
                [Parenthetical]                                                  
21: R4          Condensed Consolidated Statements of Income (Loss)  HTML    108K 
                Andcomprehensive Income (Loss)                                   
102: R5          Condensed Consolidated Statements of Cash Flows     HTML    168K  
66: R6          Organization and Principal Activities               HTML     52K 
141: R7          Liquidity                                           HTML     47K  
69: R8          Basis of Presentation                               HTML     45K 
77: R9          Principles of Consolidation                         HTML     53K 
22: R10         Use of Estimates                                    HTML     44K 
72: R11         Summary of Significant Accounting Policies          HTML     79K 
140: R12         New Accounting Pronouncements                       HTML     57K  
131: R13         Concentrations                                      HTML     59K  
99: R14         Income (Loss) Per Share                             HTML     51K 
164: R15         Inventories                                         HTML     49K  
137: R16         Notes Receivable                                    HTML     54K  
18: R17         Land Use Rights                                     HTML     51K 
29: R18         Plant and Equipment                                 HTML     55K 
163: R19         Short Term Bank Loans                               HTML     78K  
169: R20         Notes Payable                                       HTML     58K  
173: R21         Bond Payable                                        HTML     46K  
167: R22         Tax                                                 HTML     79K  
118: R23         Stock Options, Warrants and Convertible Notes       HTML     62K  
23: R24         Stock Award                                         HTML     44K 
64: R25         Intangible Assets                                   HTML     56K 
40: R26         Commitments and Contingencies                       HTML     59K 
39: R27         Subsequent Event                                    HTML     46K 
79: R28         Summary of Significant Accounting Policies          HTML    129K 
                (Policies)                                                       
117: R29         Summary of Significant Accounting Policies          HTML     63K  
                (Tables)                                                         
134: R30         Concentrations (Tables)                             HTML     58K  
50: R31         Income (Loss) Per Share (Tables)                    HTML     48K 
80: R32         Inventories (Tables)                                HTML     48K 
151: R33         Notes Receivable (Tables)                           HTML     53K  
44: R34         Land Use Rights (Tables)                            HTML     50K 
128: R35         Plant and Equipment (Tables)                        HTML     53K  
129: R36         Short Term Bank Loans (Tables)                      HTML     74K  
85: R37         Notes Payable (Tables)                              HTML     58K 
38: R38         Bond Payable (Tables)                               HTML     45K 
125: R39         Tax (Tables)                                        HTML     75K  
47: R40         Stock Options, Warrants and Convertible Notes       HTML     56K 
                (Tables)                                                         
78: R41         Commitments and Contingencies (Tables)              HTML     48K 
136: R42         Organization and Principal Activities (Narrative)   HTML     69K  
                (Details)                                                        
59: R43         Liquidity (Narrative) (Details)                     HTML     63K 
119: R44         Principles of Consolidation (Narrative) (Details)   HTML     59K  
97: R45         Summary of Significant Accounting Policies          HTML     55K 
                (Narrative) (Details)                                            
43: R46         Income (Loss) Per Share (Narrative) (Details)       HTML     43K 
146: R47         Land Use Rights (Narrative) (Details)               HTML     54K  
34: R48         Plant and Equipment (Narrative) (Details)           HTML     53K 
48: R49         Short Term Bank Loans (Narrative) (Details)         HTML     70K 
96: R50         Notes Payable (Narrative) (Details)                 HTML     47K 
109: R51         Bond Payable (Narrative) (Details)                  HTML     47K  
144: R52         Tax (Narrative) (Details)                           HTML     72K  
19: R53         Stock Options, Warrants and Convertible Notes       HTML    148K 
                (Narrative) (Details)                                            
123: R54         Stock Award (Narrative) (Details)                   HTML     49K  
90: R55         Intangible Assets (Narrative) (Details)             HTML     88K 
27: R56         Commitments and Contingencies (Narrative)           HTML     57K 
                (Details)                                                        
37: R57         Subsequent Event (Narrative) (Details)              HTML     62K 
103: R58         Schedule of Fair Value, by Balance Sheet Grouping   HTML     66K  
                (Details)                                                        
158: R59         Schedule of Cash and Cash Equivalents (Details)     HTML     49K  
177: R60         Schedule of Property and Equipment Estimated        HTML     52K  
                Useful Lives (Details)                                           
175: R61         Schedule of Average Foreign Currency Exchange       HTML     54K  
                Rates (Details)                                                  
132: R62         Schedule of Revenue and Accounts Receivable         HTML     85K  
                Percentage by Major Customers (Details)                          
58: R63         Schedule of Purchases and Accounts Payable          HTML     85K 
                Percentage by Major Suppliers (Details)                          
53: R64         Schedule of Earnings Per Share, Basic and Diluted   HTML     66K 
                (Details)                                                        
124: R65         Schedule of Inventories (Details)                   HTML     64K  
156: R66         Schedule of Notes Receivable (Details)              HTML     57K  
25: R67         Schedule of Detailed Unrelated Party Notes          HTML     50K 
                Receivable (Details)                                             
166: R68         Schedule of Land Use Rights (Details)               HTML     53K  
60: R69         Schedule of Land Use Rights Expected Amortization   HTML     56K 
                Expense (Details)                                                
86: R70         Schedule of Plant and Equipment (Details)           HTML     93K 
81: R71         Schedule of Short-term Bank Loans (Details)         HTML    147K 
56: R72         Schedule of Notes Payable (Details)                 HTML     99K 
73: R73         Schedule of Restricted Cash Held As Collateral For  HTML     52K 
                Notes Payable (Details)                                          
139: R74         Schedule of Bond Payable (Details)                  HTML     51K  
114: R75         Schedule of Components of Income Tax Expense        HTML     52K  
                (Benefit) (Details)                                              
13: R76         Schedule of Expected Components of Income Tax       HTML     63K 
                Expense (Benefit) (Details)                                      
120: R77         Schedule of Deferred Tax Assets and Liabilities     HTML     98K  
                (Details)                                                        
16: R78         Summary of Income Tax Holiday (Details)             HTML     49K 
111: R79         Schedule of Share-based Compensation, Stock         HTML     63K  
                Options, Activity (Details)                                      
35: R80         Schedule of Disclosure of Share-based               HTML     65K 
                Compensation, Stock Option Outstanding Summary                   
                (Details)                                                        
154: R81         Schedule of Guarantees For Bank Loans (Details)     HTML     52K  
147: R82         Schedule for Pledged Collateral For A Third Partys  HTML     46K  
                Bank Loans (Details)                                             
94: XML         IDEA XML File -- Filing Summary                      XML    183K 
174: XML.R1      Document and Entity Information                      XML    167K  
75: XML.R2      Condensed Consolidated Balance Sheets                XML    496K 
116: XML.R3      Condensed Consolidated Balance Sheets                XML    122K  
                [Parenthetical]                                                  
93: XML.R4      Condensed Consolidated Statements of Income (Loss)   XML    366K 
                Andcomprehensive Income (Loss)                                   
89: XML.R5      Condensed Consolidated Statements of Cash Flows      XML    488K 
14: XML.R6      Organization and Principal Activities                XML     60K 
107: XML.R7      Liquidity                                            XML     57K  
12: XML.R8      Basis of Presentation                                XML     55K 
57: XML.R9      Principles of Consolidation                          XML     62K 
83: XML.R10     Use of Estimates                                     XML     55K 
70: XML.R11     Summary of Significant Accounting Policies           XML     90K 
62: XML.R12     New Accounting Pronouncements                        XML     65K 
148: XML.R13     Concentrations                                       XML     71K  
74: XML.R14     Income (Loss) Per Share                              XML     61K 
168: XML.R15     Inventories                                          XML     60K  
112: XML.R16     Notes Receivable                                     XML     65K  
108: XML.R17     Land Use Rights                                      XML     62K  
115: XML.R18     Plant and Equipment                                  XML     67K  
46: XML.R19     Short Term Bank Loans                                XML     89K 
101: XML.R20     Notes Payable                                        XML     70K  
133: XML.R21     Bond Payable                                         XML     56K  
138: XML.R22     Tax                                                  XML     92K  
150: XML.R23     Stock Options, Warrants and Convertible Notes        XML     71K  
82: XML.R24     Stock Award                                          XML     55K 
33: XML.R25     Intangible Assets                                    XML     68K 
161: XML.R26     Commitments and Contingencies                        XML     65K  
113: XML.R27     Subsequent Event                                     XML     56K  
162: XML.R28     Summary of Significant Accounting Policies           XML    215K  
                (Policies)                                                       
24: XML.R29     Summary of Significant Accounting Policies           XML     87K 
                (Tables)                                                         
130: XML.R30     Concentrations (Tables)                              XML     75K  
127: XML.R31     Income (Loss) Per Share (Tables)                     XML     60K  
32: XML.R32     Inventories (Tables)                                 XML     59K 
165: XML.R33     Notes Receivable (Tables)                            XML     77K  
30: XML.R34     Land Use Rights (Tables)                             XML     66K 
170: XML.R35     Plant and Equipment (Tables)                         XML     65K  
155: XML.R36     Short Term Bank Loans (Tables)                       XML     86K  
145: XML.R37     Notes Payable (Tables)                               XML     75K  
149: XML.R38     Bond Payable (Tables)                                XML     56K  
92: XML.R39     Tax (Tables)                                         XML    104K 
67: XML.R40     Stock Options, Warrants and Convertible Notes        XML     72K 
                (Tables)                                                         
172: XML.R41     Commitments and Contingencies (Tables)               XML     64K  
126: XML.R42     Organization and Principal Activities (Narrative)    XML    137K  
                (Details)                                                        
160: XML.R43     Liquidity (Narrative) (Details)                      XML    128K  
31: XML.R44     Principles of Consolidation (Narrative) (Details)    XML    105K 
110: XML.R45     Summary of Significant Accounting Policies           XML     97K  
                (Narrative) (Details)                                            
63: XML.R46     Income (Loss) Per Share (Narrative) (Details)        XML     55K 
106: XML.R47     Land Use Rights (Narrative) (Details)                XML     93K  
95: XML.R48     Plant and Equipment (Narrative) (Details)            XML     87K 
51: XML.R49     Short Term Bank Loans (Narrative) (Details)          XML    143K 
121: XML.R50     Notes Payable (Narrative) (Details)                  XML     70K  
54: XML.R51     Bond Payable (Narrative) (Details)                   XML     81K 
68: XML.R52     Tax (Narrative) (Details)                            XML    154K 
17: XML.R53     Stock Options, Warrants and Convertible Notes        XML    393K 
                (Narrative) (Details)                                            
143: XML.R54     Stock Award (Narrative) (Details)                    XML     76K  
157: XML.R55     Intangible Assets (Narrative) (Details)              XML    208K  
42: XML.R56     Commitments and Contingencies (Narrative)            XML    122K 
                (Details)                                                        
45: XML.R57     Subsequent Event (Narrative) (Details)               XML    123K 
20: XML.R58     Schedule of Fair Value, by Balance Sheet Grouping    XML    126K 
                (Details)                                                        
159: XML.R59     Schedule of Cash and Cash Equivalents (Details)      XML     75K  
87: XML.R60     Schedule of Property and Equipment Estimated         XML     81K 
                Useful Lives (Details)                                           
76: XML.R61     Schedule of Average Foreign Currency Exchange        XML     87K 
                Rates (Details)                                                  
71: XML.R62     Schedule of Revenue and Accounts Receivable          XML    179K 
                Percentage by Major Customers (Details)                          
152: XML.R63     Schedule of Purchases and Accounts Payable           XML    179K  
                Percentage by Major Suppliers (Details)                          
122: XML.R64     Schedule of Earnings Per Share, Basic and Diluted    XML    127K  
                (Details)                                                        
36: XML.R65     Schedule of Inventories (Details)                    XML    125K 
55: XML.R66     Schedule of Notes Receivable (Details)               XML    100K 
65: XML.R67     Schedule of Detailed Unrelated Party Notes           XML     88K 
                Receivable (Details)                                             
26: XML.R68     Schedule of Land Use Rights (Details)                XML     87K 
61: XML.R69     Schedule of Land Use Rights Expected Amortization    XML     94K 
                Expense (Details)                                                
100: XML.R70     Schedule of Plant and Equipment (Details)            XML    213K  
11: XML.R71     Schedule of Short-term Bank Loans (Details)          XML    385K 
135: XML.R72     Schedule of Notes Payable (Details)                  XML    238K  
104: XML.R73     Schedule of Restricted Cash Held As Collateral For   XML     82K  
                Notes Payable (Details)                                          
28: XML.R74     Schedule of Bond Payable (Details)                   XML     82K 
142: XML.R75     Schedule of Components of Income Tax Expense         XML     82K  
                (Benefit) (Details)                                              
52: XML.R76     Schedule of Expected Components of Income Tax        XML    113K 
                Expense (Benefit) (Details)                                      
84: XML.R77     Schedule of Deferred Tax Assets and Liabilities      XML    226K 
                (Details)                                                        
153: XML.R78     Summary of Income Tax Holiday (Details)              XML     76K  
88: XML.R79     Schedule of Share-based Compensation, Stock          XML    115K 
                Options, Activity (Details)                                      
176: XML.R80     Schedule of Disclosure of Share-based                XML    116K  
                Compensation, Stock Option Outstanding Summary                   
                (Details)                                                        
41: XML.R81     Schedule of Guarantees For Bank Loans (Details)      XML     81K 
15: XML.R82     Schedule for Pledged Collateral For A Third Partys   XML     63K 
                Bank Loans (Details)                                             
91: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS    678K 
 5: EX-101.INS  XBRL Instance -- kndi-20130630                       XML    876K 
 7: EX-101.CAL  XBRL Calculations -- kndi-20130630_cal               XML    197K 
 8: EX-101.DEF  XBRL Definitions -- kndi-20130630_def                XML   1.39M 
 9: EX-101.LAB  XBRL Labels -- kndi-20130630_lab                     XML   2.86M 
10: EX-101.PRE  XBRL Presentations -- kndi-20130630_pre              XML   1.54M 
 6: EX-101.SCH  XBRL Schema -- kndi-20130630                         XSD    539K 
49: ZIP         XBRL Zipped Folder -- 0001062993-13-004078-xbrl      Zip    215K

‘XML.R23’   —   Stock Options, Warrants and Convertible Notes

This Financial Report is an XBRL XML File.

                                                                                                                                                                                
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<p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>NOTE 18 - STOCK OPTIONS, WARRANTS AND CONVERTIBLE NOTES</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>(a) Stock Options</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> On February 11, 2009, the Compensation Committee of the Board of Directors of the Company approved the grant of stock options for 2,600,000 shares of common stock to ten of the Company's employees and directors. The stock options vest ratably over three years and expire in ten years from the grant date. The Company valued the stock options at $2,062,964 and amortizes the stock compensation expense using the straight-line method over the service period from February 11, 2009 through February 11, 2012. The value of the options was estimated using the Black Scholes Model with an expected volatility of 164%, expected life of 10 years, risk-free interest rate of 2.76% and expected dividend yield of 0.00% . As of June 30, 2013, options for 2,366,672 shares have been exercised and 6,668 options have been forfeited. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> On October 6, 2009, the Company executed an agreement (“Cooperation Agreement”) with Wang Rui and Li Qiwen, third-party consultants, whereby Mr. Wang and Mr. Li are to provide business development services in China to the Company in exchange for options to purchase 350,000 shares of the Company’s common stock at an exercise price of $1.50 per share. Per the agreement, 250,000 of these options vested and became exercisable on March 6, 2011, and 100,000 will vest and become exercisable on June 6, 2011. The options will expire after ten years. The options are issued under and subject to the terms of the Company’s 2008 Omnibus Long-Term Incentive Plan. No required dates of service are specified on the consulting agreement. No repurchase features or cash settlement provisions are specified in the terms and conditions of the Notice of Grant of Stock Option. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The following is a summary of the stock option activities of the Company:</p> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="left"> </td> <td align="left" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="12%"> <b>Weighted Average</b> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> <b>Activity</b> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="12%"> <b>Exercise Price</b> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Outstanding as of January 1, 2013</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 326,660 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 1.01 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left">         Granted</td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> - </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> - </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">         Exercised</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> - </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> - </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left">         Cancelled</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> - </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> - </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff">Outstanding as of June 30, 2013</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 326,660 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 1.01 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> </table> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;">The following table summarizes information about stock options outstanding as of June 30, 2013:</p> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times new roman,times,serif;" width="100%"> <tr valign="top"> <td align="center" colspan="6" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> <b>Options Outstanding</b> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="39%"> <b>Options Exercisable</b> </td> <td align="left" width="2%"> </td> </tr> <tr valign="bottom"> <td align="center" nowrap="nowrap">  </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="19%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="19%"> <strong>Remaining</strong>    </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="19%"> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> </td> <td align="center" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap"> <b>Number of</b> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="19%"> <b>Exercise</b> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="19%"> <b>Contractual life</b> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="19%"> <b>Number of</b> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" width="17%"> <b>Exercise</b> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid"> <b>shares</b> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="19%"> <b>Price</b> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="19%"> <b>(in years)</b> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="19%"> <b>shares</b> </td> <td align="center" nowrap="nowrap" width="2%"> </td> <td align="center" nowrap="nowrap" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" width="17%"> <b>Price</b> </td> <td align="left" width="2%"> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff"> 226,660 </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="19%"> 0.80 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="19%"> 5.75 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%"> </td> <td align="right" bgcolor="#e6efff" width="19%"> 226,660 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> <td align="left" bgcolor="#e6efff" width="1%">$</td> <td align="right" bgcolor="#e6efff" width="17%"> 0.80 </td> <td align="left" bgcolor="#e6efff" width="2%"> </td> </tr> <tr valign="top"> <td align="center"> 100,000 </td> <td align="left" width="1%"> </td> <td align="right" width="19%"> 1.50 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="19%"> 6.25 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="19%"> 100,000 </td> <td align="left" width="2%"> </td> <td align="left" width="1%"> </td> <td align="right" width="17%"> 1.50 </td> <td align="left" width="2%"> </td> </tr> </table> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> The fair value per share of the 2,600,000 options issued to the employees and directors is $0.7934 per share. The fair value per share of the unexercised 100,000 options issued to Wang Rui and Li Qiwen, which became exercisable on June 6, 2010, is $3.44. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> <b>(b) Warrants and Convertible Notes</b> </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> On September 21, 2009, the Company executed an agreement (“Consulting Agreement”) with a third-party consultant, whereby the consultant is to provide management consulting and advisory services for a period of 12 months, beginning on September 22, 2009, and ending on September 22, 2010. As compensation for the services provided, the Company agreed to issue 200,000 warrants to purchase the Company’s common stock, with 100,000 of these warrants issued at an exercise price of $2.00 per share and 100,000 of these warrants issued at an exercise price of $2.50 per share. All of the warrants have a five year contractual term and were granted on October 22, 2009. The warrants vested in full and became exercisable on January 21, 2010, upon the closing of an initial round of financing. The fair value per share of the 100,000 warrants issued under the Consulting Agreement with an exercise price of $2.00 is $4.56, and the fair value per share of the 100,000 warrants issued under the Consulting Agreement with an exercise price of $2.50 is $4.48. As of June 30, 2013, the consultant had cashless exercised all the 200,000 warrants. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> Under a Securities Purchase Agreement, dated as of January 21, 2010, by and among the Company and certain investors thereto, the Company issued a total of $10 million of senior secured convertible notes (the “Convertible Notes”) and warrants exercisable for an aggregate of 800,000 shares of the Company’s Common Stock (the “Investor Warrants”), for gross proceeds of $10 million. As of January 21, 2010, at the price of $6.25 per share, the Convertible Notes were convertible into 1,600,000 shares of Common Stock. The Investor Warrants expired on January 21, 2013. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> Pursuant to the terms of the Convertible Notes and the Investor Warrants, on May 18, 2010, the conversion price of the Convertible Notes was adjusted to $3.5924 per share and the exercise price of the presently expired Investor Warrants and placement agent warrants was adjusted to $4.3907 per share. On August 19, 2010, the conversion price of the Convertible Notes was adjusted to $3.1146 per share and the exercise price of the presently expired Investor Warrants and placement agent warrants was adjusted to $3.8067 per share. As a result, the number of Investor Warrants and warrants issued to the placement agent were adjusted to 1,379,148 and 137,915 respectively. As of June 30, 2013, the investors had converted all $10,000,000 principal amount and $159,522 of accrued interest of the Convertible Notes into an aggregate of 3,121,121 shares of Common Stock. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> As of June 30, 2013, 1,162,073 Investor Warrants and 124,123 warrants issued to the placement agent have been exercised. The remaining 217,075 Investor Warrants and 13,792 placement agent warrants were forfeited. </p> <p align="justify" style="font-family: times new roman,times,serif; font-size: 10pt;"> On December 21, 2010, the Company agreed to sell to certain institutional investors up to 3,027,272 shares of the Company’s common stock and warrants to purchase up to 1,210,912 shares of the Company’s common stock in fixed combination, with each combination consisting of one share of common stock and a warrant to purchase 0.40 shares of common stock in a registered direct public offering (“Second Round Warrants”). The warrants became exercisable immediately following the closing date of the offering and remain exercisable for three years thereafter at an exercise price of $6.30 per share. As of June 30, 2013, the fair value of Second Round Warrants is $0.94 per share, and 218,181 Second Round Warrants have been exercised. The exercise price of the Second Round Warrants is subject to a presently undetermined exercise price adjustment as a result of the registered direct offering that closed on July 1, 2013. </p>
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