v2.3.0.11
Stockholders' Equity
 6 Months Ended
Jun. 30, 2011
Stockholders' Equity
14.
Stockholders’ Equity

Common stock issuance

The authorized common stock of the Company consists of 750,000,000 Shares with par value of $0.001.

Pursuant to the Share Exchange Agreement executed by and among the Company, Ailibao International, Ailibao International Shareholders at the Closing Date, the Company acquired all of the shares of Ailibao International from the Ailibao International Shareholders, and the Ailibao International Shareholders transferred all of the shares of Ailibao International to the Company. In exchange, the Company issued to the Ailibao International Shareholders, 317,409,000 shares of common stock and to the introducing party, 6,826,000 shares of common stock, totaling 95% of the shares of common stock of the Company issued and outstanding after the Closing Date.

As of June 30, 2011, there were 341,300,000 shares of our Common Stock outstanding.
Debt conversion and related party loan

A convertible note of $10,000 was issued in August 2010 (the “Convertible Note”) by the Company to Millenium Group, Inc. ("Millenium"), a California corporation. The owner of Millenium, Jonathan Mork, is a son of Dempsey Mork, who is the owner of Orion Investment, Inc. which holds more than 5% of the common shares of the Company as of December 31, 2010. The Convertible Note is payable in two years and a 5% interest will be charged at maturity unless earlier converted. The note is convertible at the holder's option into 4% of the Company's fully diluted common shares at the time of conversion, with anti-dilution protection (not adjusted for splits or new issuances). Upon the Closing date, the Convertible Note was converted into 8,532,500 shares of common stock.
 
The effective conversion price, which is the allocated debt fair amount divided by shares at the conversion price, is $0.001 per share and thus the calculated intrinsic value is less than zero. As a result, no beneficial conversion feature was recognized and the unamortized debt discount was zero.
 
Income per share

Net income per common share information for the three and six months ended June 30, 2011 and 2010 was as follows (unaudited):

   
Three months ended June 30,
    
Six months ended June 30,
  
   
2011
    
2010
    
2011
    
2010
  
                         
Numerator:
                        
Net income attributable to the Company’s common stockholders
   $ 5,455,160     $ 4,343,380     $ 10,973,334     $ 9,287,592  
Denominator:
                                
Weighted average number of shares outstanding, basic and diluted
     317,409,000       317,409,000       338,528,116       317,409,000  
                                 
Net income per common share – basic and diluted
   $ 0.02     $ 0.01     $ 0.03     $ 0.03  
 
According to ASC 805, Business Combinations, the number of common shares outstanding from January 1, 2010 to the Closing Date was computed on the basis of the weighted-average number of common shares of Ailibao International outstanding during the period multiplied by an exchange ratio, pursuant to the Stock Exchange Agreement.
 
The diluted net income per common share is the same as the basic net income per common share for the three and six months ended June 30, 2011 and 2010 as all potential ordinary shares are anti-dilutive and are therefore excluded from the computation of diluted net income per common share.