Note 7 - SHARE BASED PAYMENTS
On July 12, 2011, the Company issued 2,900,000 shares of the Company’s common stock to Wuying Wang, Xiaoghua Jin, Lifang Yang and Qingxin Huang, four independent parties, in exchange for the market research and other advisory services pursuant to the terms of four consultancy agreements dated May 6, 2011, June 15, 2011, April 3, 2011 and May 5, 2011 respectively (“Consultancy Agreements”) (see Note 5). The shares were fully vested and not subject to forfeiture when issued. The fair value of the shares issued was $0.31 per share and the total fair value of the shares issued was $899,000. The fair value of the shares issued was based on the quoted market price of the Company’s shares as of July 12, 2011. The total fair value of the shares issued is recognized as a share-based payment expense over the period from date of the Consultancy Agreements to the date the consultancy services are completed. The consultancy services are to be performed for two to three years. For the three months and nine months ended September 30, 2011 the Company amortized $118,817 and $118,817 respectively as share-based payment expense. The unrecognized share-based payment expense of $780,183 as of September 30, 2011 will be amortized up to July 2014. There is no tax benefit related to the share-based payment expense recognized.