Note 8 - Stockholders' Equity

9 Months Ended

Sep. 30, 2013

Notes

Note 8 - Stockholders' Equity

NOTE 8 – STOCKHOLDERS’ EQUITY

Preferred stock

The Company has 10,000,000 shares of preferred stock, par value $0.001, authorized, 1,000,000 of which we designated as our Series A Convertible Preferred Stock in December 2007 in connection with our acquisition of a 51% interest in Shandong Jiajia. On March 28, 2008 shareholders holding the Series A Convertible Preferred Stock converted their 1,000,000 shares into 2,500,000 shares of common stock, and no shares of Series A Convertible Preferred Stock were outstanding at September 30, 2013 and December 31, 2012.

In December 2007, we designated 1,295,000 shares of our preferred stock as Series B Convertible Preferred stock in connection with our acquisition of a 51% interest in Shandong Jiajia. Each share of Series B Convertible Preferred Stock is convertible into 10 shares of our common stock. In March 2008, holders of the Series B Convertible Preferred Stock converted 845,000 shares into 8,450,000 shares of common stock, and in February 2013, holders of the Series B Convertible Preferred Stock converted 450,000 shares into 4,500,000 shares of common stock. There were 0 and 450,000 shares of Series B Convertible Preferred Stock outstanding at September 30, 2013 and December 31, 2012, respectively.

Common stock

In January 2013, the Company issued 10,000,000 shares of its common stock to Mr. Wei Chen, the Company’s Chief Executive Officer for his services rendered and to be rendered in fiscal 2012 and fiscal 2013. The shares were valued at the fair market value of $30,000 on the grant date, and the Company recorded stock-based compensation of $30,000.

In August 2013, the Company issued 4,000,000 shares of its common stock to a consultant for his service from August 2013 through July 2014. The shares were valued at the fair market value of $32,000 on the grant date. The Company recorded stock-based compensation of $5,000 during the nine months ended September 30, 2013 and recorded prepaid expense of $27,000 at September 30, 2013, which will be amortized over the rest of his service periods.

In February 2013, the Company issued 4,500,000 shares of its common stock in connection with the conversion of 450,000 shares of Series B Convertible Preferred Stock.

During the nine months ended September 30, 2013, the Company issued 52,383,252 shares of its common stock in connection with the conversion of convertible notes.

Common stock purchase warrants

Warrant activity for the nine months ended September 30, 2013 was summarized as follows:

	Number of warrants	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (Years)
Outstanding at December 31, 2012	31,558,500	$                    0.20	0.33
Granted	0	0	0
Exercised	0	0	0
Expired	(31,558,500)	(0.20)	0
Outstanding at September 30, 2013	0	$                          0	0