UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No.  2 to FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

CHINA XINGBANG INDUSTRY GROUP INC.
 (Exact name of registrant as specified in its charter)
 
Nevada
 
8900
 
99-0366034
(State or other jurisdiction of
incorporation or organization)
 
(Primary Standard Industrial
Classification Code Number)
 
(I.R.S. Employer
Identification No.)
 
7/F West Tower, Star International Mansion,
No.6-20 Jinsui Rd.,
Tianhe District, Guangzhou,
Guangdong Province, P.R.C.
+86-20-38296988           +86-20-38296977     
 (Address, including zip code, and telephone number, including area code, of registrant*s principal executive offices)

Mr. Xiao Hong Yao
President and Chief Executive Officer
7/F West Tower, Star International Mansion,
No.6-20 Jinsui Rd.,
Tianhe District, Guangzhou,
Guangdong Province, P.R.C.
+86-20-38296988           +86-20-38296977      
(Name, address including zip code, and telephone number, including area code, of agent for service)

Copies to:

Barry I. Grossman, Esq.
Adam Mimeles, Esq.
Ellenoff Grossman & Schole LLP
150 East 42nd Street, 11th Floor
New York, NY 10017
212-370-1300
212-370-7889 (fax)


APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: From time to time after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:    x
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of ※large accelerated filer,§ ※accelerated filer,§ and ※smaller reporting company§ in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
x
(Do not check if a smaller reporting company)
     
 
 
 
 

 
 
CALCULATION OF REGISTRATION FEE

Title of each class of securities  to be registered
Amount to be
registered(1)
   
Proposed
maximum
offering
price per
share
   
Proposed
maximum
aggregate
offering
price
   
Amount of
registration fee
 
common stock, par value $0.001 per share, offered by certain selling stockholders
3,780,000 shares
 (3)   $ 0.31 (2)   $
1,171,800
    $
134.28
 
common stock, par value $0.001 per share, offered by certain selling stockholders
1,244,000 shares
 (4)   $ 0.31     $ 385,640       44.19  
TOTAL
5,024,000 shares
            $
1,557,440
    $
178.47
 (5)


(1)
Pursuant to Rule 416 of the Securities Act of 1933, also registered hereby are such additional and indeterminable number of shares as may be issuable due to adjustments for changes resulting from stock dividends, stock splits and similar changes.

(2)
Estimated pursuant to Rule 457 under the Securities Act of 1933 solely for the purpose of calculating the amount of the registration fee, based the price of our common stock sold in a private placement of common stock which closed on October 20, 2011. Currently, there is no trading market for our common stock.

(3)
The 3,780,000 shares of common stock are being registered for resale by certain selling stockholders named in this registration statement, which shares were issued by the registrant in the Share Exchange, as defined below.
   
(4)
The 1,244,000 shares of common stock are being registered for resale by certain selling stockholders named in this registration statement, which shares were issued by the registrant in connection with a private placement of the Company*s common stock at the offering price of $0.31 per share.
   
(5)
A filing fee of $1,003.40 has been previously paid.


The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a) may determine.
 
 
 

 

The information in this prospectus is not complete and may be changed.  We may not sell these securities until the registration statement filed with the Securities and Exchange Commission (※SEC§) is effective.  This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
 
Preliminary Prospectus
 Subject to Completion, dated ♂ , 2011
 
5,024,000
Shares of
common stock
 
This prospectus relates to the sale of up to a total of 5,024,000 shares of common stock of China Xingbang Industry Group Inc., a Nevada corporation, that may be sold from time to time by the selling stockholders named in this prospectus and their successors and assigns.  The shares of common stock subject to this prospectus include: (i) 3,780,000 shares of common stock issued in connection with our May 13, 2011 share exchange transaction; and (ii) 1,244,000 shares of common stock issued in connection with a private placement of the Company*s common stock at the offering price of RMB 2.00 (approximately $0.31) per share. The securities offered for resale hereby were issued to the applicable selling stockholders in private placement or other exempt transactions completed prior to the filing of the registration statement of which this prospectus is a part.
 
The selling stockholders may sell all or a portion of their shares through public or private transactions at prevailing market prices or at privately negotiated prices.  Information regarding the selling stockholders and the times and manner in which they may offer and sell the shares under this prospectus is provided under ※Selling Stockholders§ and ※Plan of Distribution§ in this prospectus.  We have agreed to pay all the costs and expenses of this registration.

We will not receive any of the proceeds from the sale of shares by the selling stockholders.  
 
Our common stock is not currently quoted or traded on any public market. We plan to have our common stock quoted on one of the over the counter quotation services.
 
An investment in our securities is highly speculative, involves a high degree of risk and should be considered only by persons who can afford the loss of their entire investment.  See ※Risk Factors§ beginning on page 5 of this prospectus.
 
Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus.  Any representation to the contrary is a criminal offense.

The date of this prospectus is             , 2011.
 

 
 

 
 
TABLE OF CONTENTS

 
Page
 
Number
   
About This Prospectus
  1
Prospectus Summary
  1
Risk Factors
  5
Cautionary Note Regarding Forward-Looking Statements
28
Use of Proceeds
  28
Determination of Offering Price
  28
Management*s Discussion and Analysis of Financial Conditions and Results of Operations
  29
Business
  46
Management
  63
Executive Compensation
  66
Certain Relationships and Related Transactions
  67
Security Ownership of Certain Beneficial Owners and Management
  68
Description of Securities
  69
Selling Stockholders
  69
Plan of Distribution
  75
Market for Common Equity and Related Stockholder Matters
  77
Legal Matters
  77
Experts
  77
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
  78
Where You Can Find More Information
  78
Financial Statements
  F-1
 
 
 
 

 
 
 
ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement we filed with the SEC.  You should rely only on the information provided in this prospectus and incorporated by reference in this prospectus.  We have not authorized anyone to provide you with information different from that contained in or incorporated by reference into this prospectus.  This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the common stock offered by this prospectus.  This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any common stock in any circumstances in which such offer or solicitation is unlawful.  The selling stockholders are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted.

Neither the delivery of this prospectus nor any sale made in connection with this prospectus shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this prospectus or that the information contained by reference to this prospectus is correct as of any time after its date.  The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of common stock.  The rules of the SEC may require us to update this prospectus in the future.

 
PROSPECTUS SUMMARY
 
The following summary highlights selected information contained in this prospectus.  This summary does not contain all the information you should consider before investing in the securities.  Before making an investment decision, you should read the entire prospectus carefully, including the information set forth under the headings ※Risk Factors§ and ※Management*s Discussion and Analysis of Financial Condition and Results of Operations,§ and the financial statements and the notes to the financial statements included in this prospectus.

Certain Definitional Conventions Used in this Current Report
 
In this prospectus, unless the context requires or is otherwise specified, references to the ※Company,§ ※we,§ ※us,§ ※our§ and similar expressions include the following entities (as defined herein):
 
(i)            China Xingbang Industry Group Inc., a Nevada corporation (※ Xingbang NV § or the ※ Registrant §);
 
(ii)           Xing Bang Industry Group Limited, a British Virgin Islands company and a wholly-owned subsidiary of the Registrant (※ Xingbang BVI §);
 
(iii)          China Group Purchase Alliance Limited, a Hong Kong company and a wholly-owned subsidiary of Xingbang BVI (※ Xingbang HK §);
 
(iv)          Guangzhou Xingbang Information Consulting Co., Ltd., a wholly foreign-owned enterprise, or the ※ WFOE §, formed in the PRC and a wholly-owned subsidiary of Xingbang HK; and
 
(iv)          Guangdong Xingbang Industry Information & Media Co. Ltd., our principal operating subsidiary, which is a Chinese variable interest entity that the WFOE controls through certain contractual arrangements (※ Guangdong Xingbang §).
 
As used in this prospectus, ※China§ or ※the PRC§ refers to the People*s Republic of China.
 
Our Company

We were incorporated under the laws of the State of Nevada on April 12, 2011.  Our principal offices are located at 7/F West Tower, Star International Mansion, No.6-20 Jinsui Rd.,Tianhe District, Guangzhou, Guangdong Province, PRC.   We, through our wholly owned subsidiaries Xingbang BVI and Xingbang HK, own the WFOE, which controls Guangdong Xingbang, a variable interest entity, through a series of VIE contractual arrangements.  Guangdong Xingbang is the sole source of our income and operations.  A summary of our business is described below.
 
 
- 1 -

 
 
Based in the city of Guangzhou, Guangdong Province, China, Guangdong Xingbang is a profitable and growing company principally engaged in the provision of e-commerce related services, marketing consultancy services, to manufacturers, distributors and other businesses in the lighting, ceramics and other home furnishings industry in the PRC, as well as consulting services to the local governments in the PRC.
 
We generated revenue of $4.68 million and $5.22 million for our fiscal year 2009 and 2010, respectively, representing an increase of 11.54%.  We had two major revenue streams, advertising in our newspapers and providing consulting services. Our advertising revenue was $3.39 million and $3.47 million in 2009 and 2010, respectively, amounting to a growth of 2.36%. Our revenue from consulting services was $1.29 million and $1.76 million in 2009 and 2010, respectively, representing an increase of approximately 36.43%. Approximately  27.5% and 33.6% of our revenues in 2009 and 2010, respectively, were from consulting services.
 
Background and Key Events

We were incorporated under the laws of the State of Nevada on April 12, 2011.  

Share Exchange with Xingbang BVI

On May 13, 2011, China Xingbang entered into a share exchange agreement with Xingbang BVI and the stockholders of Xingbang BVI in which the stockholders of Xingbang BVI exchanged 100% of the issued share capital of Xingbang BVI, valued at $80,000, for 79,999,000 shares of common stock of China Xingbang (the ※Share Exchange§). Xingbang BVI became a wholly owned subsidiary of China Xingbang. Prior to the Share Exchange, the sole stockholder of China Xingbang owned 56.25% of the issued share capital of Xingbang BVI.

Corporate Structure and Related Agreements

Our post Share Exchange organizational structure is summarized below:


 
- 2 -

 
 
Pursuant to the VIE Agreements, the WFOE effectively assumed management of the business activities of Guangdong Xingbang and has the right to appoint all executives and senior management and the members of the board of directors of Guangdong Xingbang.  The VIE Agreements are comprised of a series of agreements, including an Exclusive Consulting Services Agreement, Operating Agreement, Voting Rights Proxy Agreement, Equity Pledge Agreement and Option Agreement, through which the WFOE has the right to advise, consult, manage and operate Guangdong Xingbang for an annual consulting service fee in the amount of Guangdong Xingbang*s annual net income.   Mr. Xiaohong Yao and Ms. Dongmei Zhong, who are the only shareholders of Guangdong Xingbang (the ※ Guangdong Xingbang Shareholders §) have pledged their right, title and equity interests in Guangdong Xingbang as security for the WFOE to collect consulting services fees provided to Guangdong Xingbang through an Equity Pledge Agreement.  In order to further reinforce the WFOE*s rights to control and operate Guangdong Xingbang, the Guangdong Xingbang Shareholders have granted the WFOE an exclusive right and option to acquire all of their equity interests in Guangdong Xingbang through an Option Agreement.
 
 
Equity Interest Pledge Agreement. The WFOE and the Guangdong Xingbang Shareholders have entered into Equity Interest Pledge Agreements, pursuant to which each shareholder pledges all of his shares of Guangdong Xingbang to the WFOE in order to guarantee cash-flow payments under the applicable Consulting Services Agreement. The Equity Pledge Agreement further entitles the WFOE to collect dividends from Guangdong Xingbang during the term of the pledge.  The Equity Pledge Agreement shall be effective for the maximum period of time permitted by Chinese law, which is currently 20 years. In the event Guangdong Xingbang fails to cure a material breach, WFOE may, among other remedies available, terminate this agreement.
 
 
Consulting Service Agreement. Guangdong Xingbang and the WFOE have entered into a Consulting Services Agreement, which provides that the WFOE will be the exclusive provider of consulting and management services to Guangdong Xingbang and Guangdong Xingbang will pay all of its net income to the WFOE quarterly for such services.  Any such payment from the WFOE to the Company would need to comply with applicable Chinese laws affecting payments from Chinese companies to non-Chinese companies.  See ※Risk Factors 每 Risks Associated With Doing Business in China.§  The Consulting Services Agreement shall be effective until it is terminated by either party in the event the other party becomes bankrupt or insolvent, if the WFOE ceases operations, or if circumstances arise which materially and adversely affect the performance or the objectives of the agreement. The WFOE may also terminate such agreement with or without cause.
 
 
Operating Agreement. Pursuant to the Operating Agreement among the WFOE, Guangdong Xingbang and each of the Guangdong Xingbang Shareholders, the WFOE provides guidance and instructions on Guangdong Xingbang*s daily operations and financial affairs. The Guangdong Xingbang Shareholders must designate the candidates recommended by the WFOE as their representatives on their respective boards of directors. The WFOE has the right to appoint senior executives of Guangdong Xingbang. In addition, the WFOE agrees to guarantee Guangdong Xingbang*s performance under any agreements or arrangements relating to Guangdong Xingbang*s business arrangements with any third party. Guangdong Xingbang, in return, agrees to pledge its accounts receivable and all of its assets to the WFOE. Moreover, Guangdong Xingbang agrees that without the prior consent of the WFOE, Guangdong Xingbang will not engage in any transactions that could materially affect its assets, liabilities, rights or operations, including, without limitation, incurrence or assumption of any indebtedness, sale or purchase of any assets or rights, incurrence of any encumbrance on any of its assets or intellectual property rights in favor of a third party or transfer of any agreements relating to its business operation to any third party.  The Operating Agreement shall be effective for the maximum period of time permitted by Chinese law (currently 20 years) unless terminated by the WFOE with a 30-day prior written notice.  In addition, the WFOE has the right but not obligation to terminate the Operating Agreement in the event any of the agreements between WFOE and Guangdong Xingbang are terminated or expired.
 
 
 
 
- 3 -

 
 
 
 
Option Agreement. Pursuant to the Option Agreement among the WFOE, Guangdong Xingbang and each of Guangdong Xingbang Shareholder, the Guangdong Xingbang Shareholders have granted the WFOE an exclusive right and option to acquire all of their equity interests in Guangdong Xingbang upon an event of default. The Operating Agreement is effective for the maximum period of time permitted by Chinese law (currently 20 years).
 
 
Voting Right Proxy Agreement. Pursuant to the Voting Right Proxy Agreement among the WFOE, Guangdong Xingbang and the Guangdong Xingbang Shareholders, the Guangdong Xingbang Shareholders have granted the WFOE a voting and proxy right to vote their equity interest in Guangdong Xingbang.  The Voting Right Proxy Agreement is effective until terminated by mutual agreement or by the WFOE with 30 days prior written notice.
 
Although we did not obtain any legal opinion from, nor been advised by any PRC legal counsel, management believes the above corporate structure complies with the PRC legal restrictions on foreign investment in the publication and e-commerce industries.

Executive Offices

Our executive office is located at 7/F West Tower, Star International Mansion, No.6-20 Jinsui Rd.,Tianhe District, Guangzhou, Guangdong Province, PRC. Our telephone number is +86(20) 38296988.
 
THE OFFERING

Common Stock Outstanding before the Offering
 
81,244,000
     
Common Stock Offered by Selling Stockholders
 
Up to 5,024,000  shares of common stock held by the selling stockholders
     
Common Stock to be Outstanding After the offering
 
Up to 81,244,000 shares
     
Use of proceeds
 
We will not receive any proceeds from the sale of the common stock offered hereby.  
 

 
- 4 -

 
 
RISK FACTORS

Item 1A.  Risk Factors.

Our business, operations and financial condition are subject to various risks.  Some of these risks are described below and you should take these risks into account in making a decision to invest in our common stock.  If any of the following risks actually occur, we may not be able to conduct our business as currently planned and our financial condition and operating results could be seriously harmed.  In that case, the market price of our common stock could decline and you could lose all or part of your investment in our common stock.
 
Risks Related to Our Business

Current economic conditions and the global financial crisis may have an impact on our business and financial condition in ways that we currently cannot predict.
 
Our results of operations are sensitive to changes in overall economic and political conditions that impact consumer spending and consumer purchases of home furnishing products.  Decoration services tend to decline during recession. The current uncertainty arising out of domestic and global economic conditions, including the recent disruption in credit markets, poses a risk to the PRC economy, and may impact our ability to increase our income. As a result, there has been a shift away from discretionary spending for advertising and marketing services.  Continued tightness within our clients marketing budgets may adversely affect our financial condition and results of operations, resulting in a reduction in our revenues.
 
Our limited operating history may not serve as an adequate basis to judge our future prospects and results of operations.
 
Our limited operating history in the advertising and consulting industry may not provide a meaningful basis for evaluating our business.  We started our advertising and consulting business in 2002 .    We are in the process of shifting our focus to becoming an e-commerce operator while maintaining our current advertising and consulting business.  Although our revenues have grown rapidly since inception, we cannot guarantee that we will maintain profitability or that we will not incur net losses in the future.  We will continue to encounter risks and difficulties that companies at a similar stage of development frequently experience, including the potential failure to:
 
 
obtain sufficient working capital to support our expansion;
 
expand our services offerings and maintain the quality of our advertising services;

 
maintain our proprietary technology;
 
manage our expanding operations and continue to fill customers* orders on time;

 
maintain adequate control of our expenses allowing us to realize anticipated revenue growth;
 
implement our product development, marketing and sales strategies and adapt and modify them as needed;

 
integrate any future acquisitions; and
 
anticipate and adapt to changing conditions in the Chinese home furnishings industry resulting from changes in government regulations, mergers and acquisitions involving our competitors, technological developments and other significant competitive and market dynamics.
 
If we are unable to address any or all of the foregoing risks, our business may be materially and adversely affected.  
 
If we are unable to execute our e-commerce business strategy, our business and future prospects  may be materially and adversely affected.
 
We have limited experience in e-commerce. Since our inception, we attempted to conduct business to consumer business (※B2C§) in 2006 and business to consumer web portal business (※B2B§) in 2009. Both efforts were terminated.
 
 
- 5 -

 
 
In 2006, we started a web portal whereby we introduced restaurants, hotels, travel destinations and retail stores to consumers in Guangzhou City, Guangdong. However, due to our lack of experience in the consumer industry, we decided to discontinue the B2C business in the same year.
 
In 2009, Zhongshan Xingbang Purchase & Exhibition Service Co., Ltd. (※ Zhongshan Xingbang §), a company controlled by Mr. Xiaohong Yao, our Chairman of the Board, CEO and President, tried to enter into the B2B business.  It offered online trade shows to manufacturers and retailers who were paid registered members of the website.  However, manufacturers and retailers found they could achieve similar results by having offline networking events, without being obligated to pay any commission.  After operating the B2B web portal for almost a year, it decided to discontinue it and we shifted to develop the ju51 Online Mall.
 
ju51 Online Mall is B2B2C business. Although we have derived some experience through our past operation of e-commerce business, we cannot assure you that we have sufficient management experience, human resources and technical capability to operate this new line of business.  Our ability to achieve satisfactory financial results in our new line of business is unproven. Failure to execute our e-commerce strategy in the development and operation of the ju51 Online Mall may result in negative results of operation and may harm our future growth prospects.
 
We may not be able to effectively control and manage our growth.
 
If our business and markets grow and develop as we expect, it will be necessary for us to finance and manage expansion in an orderly fashion. We may face challenges in managing new lines of business, expanding product offerings and in integrating acquired businesses with our own. Such eventualities will increase demands on our existing management and facilities. Failure to manage this growth and expansion could interrupt or adversely affect our operations, cause production backlogs, longer product development time frames and administrative inefficiencies.
 
We will likely need to raise additional funds in the future to grow our business, which funds may not be available on acceptable terms or at all, and, without additional funds, we may not be able to maintain or expand our business.
 
We expect that the cash generated from operations will be sufficient to fund our present operations. It is likely that in the future we will require substantial funds in order to fund operating expenses associated with the expansion of the ju51 Online Mall into other home furnishing sectors, to fund acquisition of channel service providers or other businesses, and to cover public company costs.  Without enough funds, we may not be able to meet these goals.  We may seek additional funding through public or private financing or through collaborative arrangements with strategic partners.
 
You should also be aware that in the future:
 
♂ 
 
We cannot be certain that additional capital will be available on favorable terms, if at all;
     
♂ 
 
Any available additional financing may not be adequate to meet our goals; and
     
♂ 
 
Any equity financing would result in dilution to stockholders.
 
If we cannot raise additional funds when needed, or on acceptable terms, we may not be able to effectively execute our growth strategy, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. In addition, we may be required to scale back or discontinue our production and development program, or obtain funds through strategic alliances that may require us to relinquish certain rights.
 
Our business depends heavily on the market recognition of our brand and our reputation in the home furnishing industry, and any harm to our brand or failure to maintain and enhance our brand recognition may materially and adversely affect our business, financial condition and results of operations.
 
 
- 6 -

 
 
We believe that the market recognition of our brand and our reputation have significantly contributed to the success of our business. Maintaining and enhancing the recognition and reputation of our brand are critical to our success.  Many factors, some of which are beyond our control, are important to maintaining our reputation, including:
 
 
our ability to maintain a client*s positive experience with our services as the end consumers* preferences evolve and as we develop the new e-commerce business and expand into new sectors in the home furnishing industry;
 
In addition, the following factors are important to maintain our established market position when we officially launch our online mall later in 2011:
 
 
our ability to increase brand awareness among existing and potential customers through various means of marketing and promotional activities;
     
 
the efficiency, reliability and service quality of our channel service providers;
     
 
our ability to effectively control the product quality of flagship stores and to monitor service performance of flagship stores, channel service providers and direct sale stores as we continue to develop our marketplace program; and
     
 
any negative media publicity about e-commerce, its security or product quality associated with e-commerce operators in China.
 
If we are unable to maintain our reputation, further enhance our brand recognition and increase positive awareness of our website, our results of operations and future growth prospectus may be materially and adversely affected.
 
In the event we are unable to continue our cooperation with the operator of Shopping Guide, it will adversely affect the advertising revenue from our newspapers.
 
In China, the press and publication industry is heavily regulated. Only certified publishers are issued with a Standard Serial Number, or SSN, by GAPP (General Administration of Press and Publication of the People*s Republic of China) and can publish newspapers. We have agreements with Shopping Guide to act as the exclusive advertising agents for ※Guzhen Lighting Weekly§ and ※China Ceramics Weekly§ special edition. According to relevant PRC laws and regulations, we may not be regarded as the operator of the two newspapers, although we are authorized by Shopping Guide to use the Shopping Guide*s SSN. There is no assurance that we will be able to maintain the relationship with Shopping Guide or that the relationship would continue on favorable terms. If Shopping Guide withdraws the authorization, we may no longer publish Guzhen Lighting Weekly and China Ceramics Weekly and we may not be able to place advertisements for our clients. We cannot assure that we will be able to find other certified press, or on terms acceptable to us, who may permit us to use the SSN. In such event, our advertising revenue will be materially and adversely affected as we may be forced to cease publishing these newspapers.
 
Results of operations for our current advertising and consulting business are subject to quarterly fluctuations that could adversely affect our business.
 
We experience seasonality in our advertising and market consulting business. The first quarter of each year, when a majority of the period is celebration of the New Year and Chinese New Year, is a low season due to the slow-down of home decoration. During this quarter, manufacturers and dealers usually cut their advertising expenditure.  In China, people usually finish apartment or house renovation and decoration before Chinese New Year, so that they can move into their new home to celebrate the holiday.
 
 
- 7 -

 
 
If the content of our newspapers are no longer attractive, our clients will cut advertising expenditures with us, which will adversely affect our revenue.
 
We believe one of our competitive advantages is that the content we put up on the newspapers and websites is impartial, informative and attractive to the average home-furnishing businesses. If we make substantial changes to the content or if we fail to keep up with the readers* changing preferences, our newspapers and websites will be of less interest to the readers and will adversely affect our revenue.
 
If our newspapers are ordered to suspend or stop publication by the PRC government, our revenue will be adversely affected.
 
The press industry is heavily regulated and censorship is stringent in China, so there is no assurance that the content of our newspapers will not be found to be in violation of relevant censorship or publication regulations, in which case the relevant PRC authority may order us to suspend or terminate publication of our newspapers or order shut-down of our websites.   In such case, our advertising and consulting revenue will be adversely affected.
 
If our newspapers could not be delivered to subscribers timely, our revenue will be adversely affected.
 
We started engaging the Chinese Post Office to distribute our newspapers as a supplement to our own distribution network in January and February of 2011 for newspapers printed in Beijing and Guangdong, respectively.  There have been delays for subscribers in receiving the newspapers distributed by the Chinese Post Office.  There is no assurance that we will be financially capable of expanding our distribution network.  If we have to rely on the Chinese Postal Office for a larger portion of our distribution, we may incur constant delay in delivery of the newspapers. In addition, if there is any major public transportation crisis or breakdown, our own distribution network will be affected.  Any major delay in delivery of our newspapers to our readers will adversely affect expansion of our advertisement target base and affect our revenues and results of operation.
 
Continuing growth of the advertising and consulting business depends on expansion of our operation in other home-furnishing sectors.
  
To keep high growth in the advertising industry targeted at home-furnishing businesses, it is important to expand into new home-furnishing sectors.  Management believes the most beneficial way to expand is to acquire existing newspapers or other media in the other home-furnishing sectors where we currently do not have operations. There are many risks associated with acquisition of desired business targets.  If we are unable to acquire and integrate new newspapers, our revenue and profitability may suffer.
 
For our future e-commerce business, we may face intense competition. If we cannot compete successfully against competitors, we may not be able to acquire meaningful market share.
 
The operating environment for the ju51 Mall is expected to be competitive. Our competitors may include: (1) other B2C e-commerce companies, such as Qijia Net, Liba Net and Taobao Mall; (2) brick and mortar retailers and distributors, many of which possess significant brand recognition, sales volume and customer bases, and some of which currently sell, or in the future may sell, products or services through the internet; and (3) a number of indirect competitors, including well established portals and internet search engines that are involved in e-commerce, either directly or in collaboration with other retailers. Although we believe our planned business model is substantially different from other e-commerce operators in the home furnishing industry, there is no assurance that these competitors, or new ones, will not set up similar or even superior business models than ours.

We will face a variety of competitive challenges including: keeping products offered in the ju51 Online Mall competitive in price, quality products and after sale services to consumers; maintaining favorable brand recognition; providing quality services to the business who pay service charges to us; and conducting strong and effective marketing campaigns. If we cannot properly address these challenges, our business and prospects will be materially and adversely affected.
 
Some of our competitors have significantly greater financial, marketing and other resources than us. In addition, other online retailers or channel service providers may be acquired by, receive investment from or enter into strategic relationships with, well-established and well-financed companies or investors which would ask them to terminate their relationship with us. Increased competition may reduce our operating margins, market share and brand recognition, or force us to incur losses. There can be no assurance that we will be able to compete successfully against current and future competitors, and competitive pressures may have a material adverse effect on our business, prospects, financial condition and results of operations.
 
 
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The proper functioning of our website will be essential to our future e-commerce business and any failure to maintain the satisfactory performance, security and integrity of our website will materially and adversely affect our business, reputation, financial condition and results of operations.
 
The satisfactory performance, reliability and availability of our website, our transaction-processing systems and our network infrastructure will be critical to our success and our ability to attract and retain customers and maintain adequate customer service levels. Our revenues will depend on retaining a number of flagship stores, direct sale stores and channel service providers. Any system interruptions caused by telecommunications failures, computer viruses, hacking or other attempts to harm our systems that result in the unavailability or slowdown of our website or reduced order fulfillment or other performance will reduce the volume of ju51 online mall products sold and the attractiveness of ju51 online mall product offerings at our website. Our servers will also be vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions, delays, loss of data or the inability to accept and fulfill customer orders. We may also experience interruptions caused by reasons beyond our control.
  
We will use externally developed systems for our website and substantially all aspects of transaction processing, including order management, cash, debit card and credit card processing, purchasing, inventory management and shipping. We intend to upgrade and expand our systems and to integrate newly developed or purchased software with our existing systems to support the smooth operation of our ju51 online mall. Failure to develop and upgrade our existing technology, transaction-processing systems or network infrastructure to accommodate increased traffic on our website or increased sales volume through our transaction-processing systems may cause unanticipated system disruptions, slower response time, degradation in levels of customer service and impaired quality and speed of order fulfillment, which would have a material adverse effect on our business, reputation, financial condition and future growth prospects.
 
If we fail to successfully adopt new technologies or adapt our website and systems to customer requirements or emerging industry standards, our e-commerce business, prospects and financial results will likely be materially and adversely affected.
 
To remain competitive, we will have to continue to enhance and improve the responsiveness, functionality and features of our website. The internet and e-commerce industry are characterized by rapid technological evolution, changes in user requirements and preferences, frequent introductions of new products and services embodying new technologies and the emergence of new industry standards and practices that could render our existing proprietary technologies and systems obsolete. Our success will depend, in part, on our ability to identify, develop, acquire or license leading technologies useful in our business, enhance our existing services, develop new services and technologies that address the increasingly sophisticated and varied needs of our existing and prospective customers, and respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. The development of website and other proprietary technology entails significant technical and business risks. There can be no assurance that we will be able to use new technologies effectively or adapt our website, proprietary technologies and transaction-processing systems to customer requirements or emerging industry standards. If we are unable to adapt in a cost-effective and timely manner in response to changing market conditions or customer requirements, whether for technical, legal, financial or other reasons, our business, prospects, financial condition and results of operations would be materially adversely affected.
 
Any interruption in the operation of our data centers for an extended period will likely have an adverse impact on our e-commerce business.
 
Our ability to accurately process and fulfill orders placed on the ju51 Mall and provide high-quality customer service will depend on the efficient and uninterrupted operation of our data centers and logistics centers. Our data centers and logistics centers may be vulnerable to damage caused by fire, flood, power loss, telecommunications failure, break-ins, earthquake, human error and other events. In addition, we do not anticipate having additional back-up systems or a formal disaster recovery plan at the beginning stage of operation of the ju51 Mall and will not carry business interruption insurance to compensate for losses that may occur. The occurrence of any of the foregoing risks will likely have a material adverse effect on our business, prospects, reputation, financial condition and future operating prospects.
 
 
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Failure to protect confidential information of our ju51 online mall customers and our network against security breaches will likely damage our reputation and brand and substantially harm our business and results of operations.
 
A significant challenge to online commerce and communications is the secure transmission and retention of confidential information over public networks. Management anticipates all product orders will be made through our website. All the online payments for our ju51 Online Mall products will be settled through third-party online payment services. In such transactions, maintaining complete security for the transmission of confidential information on our website, such as customers* credit card numbers and expiration dates, personal information and billing addresses, is essential to maintain consumer confidence. We will have limited influence over the security measures of third-party online payment service providers. In addition, we will hold certain private information about our ju51 Online Mall customers, such as their names, addresses, phone numbers and browsing and purchasing records. We may not be able to prevent third parties, such as hackers or criminal organizations, from stealing information provided by our customers to us through our website. In addition, our flagship stores, direct sale stores and channel service providers may violate their confidentiality obligations and disclose information about our customers. Any compromise of our security or third-party service providers* security could have a material adverse effect on our reputation, business, prospects, financial condition and results of operations. Although we have had no such issues to date, we cannot assure you that events concerning leak of confidential information out of our control will not occur in the future, which could cause serious harm to our brand and reputation.

In addition, significant capital and other resources may be required to protect against security breaches or to alleviate problems caused by such breaches. The methods used by hackers and others engaged in online criminal activity are increasingly sophisticated and constantly evolving. Even if we are successful in adapting to and preventing new security breaches, any perception by the public that online commerce and transactions, or the privacy of user information, are becoming increasingly unsafe or vulnerable to attack could inhibit the growth of e-commerce and other online services generally, which in turn may reduce the revenue from our e-commerce service offerings.
 
We will depend on independent third parties for the operation and maintenance of our e-commerce business and any interruption with these parties may adversely affect our results of operation.
 
Our ju51 Online Mall is expected to be a B2B2C e-commerce platform for manufacturers, dealers, retailers and consumers. We intend to duplicate the offline distribution system on the Internet, where we rent ※space§ to manufacturers, distributors, retailers, interior designers and other vendors in return for ※rent§ or service charges.  We will not offer products for sale to consumers ourselves.   We will depend on a number of independent third parties to generate revenues for the ju51 Mall.   We will depend on manufacturers who will open flagship stores to showcase and sell their products, list prices for products, and process orders placed online by consumers.  We will depend on direct sale stores who are retailers to provide product support and services to consumers. We will depend on channel service providers to provide delivery services. Our revenue will rely on the commission payable by manufacturers for the flagship stores, rent payable by retailers for the direct stores and service fees payable by distributors to become channel service providers.  The manufacturers will pay commission, based on a percentage of sales generated through our site, the retailers will pay a fixed amount of rent and the distributors will pay variable service charges depending on the total population in the particular geographic area covered by the distributor. We will rely on third parties to provide a secured payment system. In addition, although we operate and maintain the website ourselves, we will depend on telecommunication service providers to provide Internet connection or other parties to host our servers.  Failure of any of these independent third parties to provide quality products and services to customers may negatively impact the shopping experience in our ju51 Online Mall and damage our market reputation and adversely affect our business and results of operations.
 
 
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For our e-commerce business, we will incur significant costs on a variety of marketing efforts designed to increase sales of products on our ju51 Online Mall and some marketing campaigns and methods may turn out to be ineffective.
 
             We rely on a variety of different marketing efforts tailored to our targeted customers to increase sales of products on our ju51 Online Mall. Our marketing activities, which often involve significant costs, may not be well received by customers and may not result in the levels of product sales on our ju51 Online Mall that we anticipate. Marketing approaches and tools in the home furnishings industry in China are evolving. This further requires us to enhance our marketing campaign and experiment with new marketing approaches to keep pace with industry developments and customer preferences. Failure to refine our existing marketing approaches or to introduce new effective marketing approaches in a cost-effective manner could reduce our market share, cause our revenues to decline and negatively impact our profitability.
 
Our business depends and will depend substantially on the continuing efforts of our present and future executive officers, and our business may be severely disrupted if we lose, are unable to obtain or unable to replace, their services.
 
Our future prospects depend substantially on the continued services of our executive officers, especially Mr. Yao, our Chairman, Chief Executive Officer and President. We do not maintain key man life insurance on any of our executive officers.  If one or more of our executive officers are unable or unwilling to continue in their present positions, we may not be able to replace them readily, if at all.  Therefore, our business may be severely disrupted, and we may incur additional expenses to recruit and retain new officers.  In addition, if any of our executives joins a competitor or forms a competing company, we may lose some of our customers. Each of our executive officers has entered into an employment agreement with us, which contains non-compete provisions. However, if any dispute arises between our executive officers and us, we cannot assure you that we would be able to enforce these non-compete provisions in China, where these executive officers reside, in light of uncertainties with China*s legal system. Failure to retain the services of Mr. Yao or any other key employee may harm our reputation, financial prospects and future growth.
 
Our business and growth will suffer if we are unable to hire and retain key personnel that are in high demand.
 
Our future performance depends on our ability to attract and retain highly skilled designers, reporters, technical, marketing and sales personnel.  Qualified individuals are in high demand in China, and there are insufficient experienced personnel to fill the demand. The advertisement and e-commerce industry is characterized by high demand and intense competition for talent.  Considering our limited operating history, our ability to train and integrate new employees into our operations may not meet the growing demands of our business. Therefore, we may not be able to attract or retain the personnel we need to succeed.
 
Implementation of new PRC labor contract and labor laws relating to social insurance may adversely affect our business and results of operations.
 
Pursuant to a new PRC labor contract law that became effective in 2008, employers in China are subject to stricter requirements in terms of signing labor contracts, paying remuneration, determining the term of employees* probation and unilaterally terminating labor contracts. The new labor contract law and related regulations impose greater liabilities on employers and may significantly increase the costs to an employer if it decides to reduce its workforce. In the event we decide to significantly change or reduce our workforce, the new labor contract law could adversely affect our ability to make such changes in a manner that is most favorable to our business or in a timely and cost effective manner.
 
 
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Companies operating in China must comply with a variety of labor laws, including certain pension, health insurance, unemployment insurance and other welfare-oriented payment obligations.  Our failure to comply with these laws could have a material adverse effect on our business.
 
Our existing shareholders have substantial influence over our company and their interests may not be aligned with the interests of our other shareholders.
 
Currently, our co-founders, Mr. Xiaohong Yao and Ms. Dongmei Zhong, who are husband and wife, jointly own an aggregate of 56.25% of our outstanding shares through Future Media International Limited, a BVI entity. Mr. Yao, as the sole director of Future Media International Limited, has substantial influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. He may take actions that are not in the best interest of us or our other shareholders. These actions may be taken even if he is opposed by our other shareholders, including those who purchase shares in future offerings.  This concentration of ownership may discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of our shares. For more information regarding our principal shareholders and their affiliated entities, see ※Corporate Structure.§
 
We may not be able to adequately protect our intellectual property, which could cause us to be less competitive and negatively impact our business.
 
We regard our trademarks, software registrations, trade secrets, domain names and other intellectual property as important to our success.  We rely on trademark, patent and trade secret law, as well as confidentiality agreements with certain of our employees, to protect our proprietary rights.  We include a standard confidentiality clause in our employment agreements to prevent our employees from disclosing confidential information to outside parties. No assurance can be given that our intellectual property will not be challenged, invalidated, infringed or circumvented.  Any material impairment of our intellectual property rights could have a material adverse effect on our business.
 
In addition, intellectual property rights in China are still developing, and there are uncertainties involved in the protection and the enforcement of such rights.  We will need to pay special attention to protecting our intellectual property.  Failure to do so could lead to the loss of a competitive advantage that could not be compensated by our damages award.
 
Future strategic alliances or acquisitions may have a material and adverse effect on our business, reputation and results of operations.
 
We may in the future enter into strategic alliances with various third parties. Strategic alliances with third parties could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the counter-party, and an increase in expenses incurred in establishing new strategic alliances, any of which may materially and adversely affect our business. We may have little ability to control or monitor their actions. To the extent strategic third parties suffer negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with such third parties.
 
In addition, although we have no current acquisition plans, if we are presented with appropriate opportunities, we may acquire additional assets, products, technologies or businesses that are complementary to our existing business. Future acquisitions and the subsequent integration of new assets and businesses into our own would require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our business operations. Acquired assets or businesses may not generate the financial results we expect. In addition, acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant. In addition to possible shareholders* approval, we may also have to obtain approvals and licenses from the relevant government authorities in the PRC for the acquisitions and to comply with any applicable PRC laws and regulations, which could result in increased costs and delay.
  
 
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We may need additional capital, and the sale of additional shares or other equity securities could result in dilution to our shareholders.
 
We believe that our current cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for the foreseeable future. We may, however, require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If these resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. It is uncertain whether financing will be available in amounts or on terms acceptable to us, if at all.
 
If we fail to implement and maintain an effective system of internal controls (or fail to remediate the material weakness in our internal control over financial reporting that has been identified), we may be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.
 
Prior to filing of this registration statement, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. Currently, we do not have a Chief Financial Officer, any officer or accounting staff who is familiar with the accounting and reporting requirements of a U.S. publicly-listed company.  Although we intend to retain the services of such officer and staff as soon as possible, no assurances can be given that we will be able to identify or afford the financial requirements of qualified candidates.  The position of Chief Financial Officer of a U.S. publicly-listed company is critical to the operations of such a company, and our failure to fill this position in a timely and effective manner will negatively impact our business.
 
Our business license is subject to governmental control and renewal, and the failure to obtain renewal would cause all our operations to be suspended and have a material adverse effect on our financial condition.
 
We are subject to various PRC laws and regulations pertaining to the advertising and e-commerce industry.  Our business license and the advertising agency right granted by Shopping Guide allow us to conduct advertising business.  Our business license also allows us to engage in e-commerce operation.  However, we may there is no assurance that we will be able to  maintain our business license. If our business license is revoked or terminated by the government, all our operations will have to be suspended, which would have a material adverse effect on our business and financial condition.
 
Because we may not be able to obtain business insurance in the PRC, we may not be protected from risks that are customarily covered by insurance in the United States.
 
Business insurance is not readily available in the PRC.  To the extent that we suffer a loss of a type which would normally be covered by insurance in the United States, such as general liability insurance, we would incur significant expenses in both defending any action and in paying any claims that result from a settlement or judgment.  It is possible that consumers may initiate proceedings against manufacturers or distributors who advertised through our newspaper or website and add us as co-defendant in such product liability actions. We have not obtained any property or liability insurance in China.  Any losses incurred by us will have to be borne by us without any assistance, and we may not have sufficient capital to cover material damage to, and such loss would have a material adverse effect on, our financial condition, business and prospects.
 
We do not carry directors and officers* liability insurance to cover any expenses and losses due to lawsuits related to financial reporting errors.  Our indemnification obligations could adversely affect our business, financial condition and results of operations.
 
 
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We have not obtained director and officer liability insurance to cover lawsuit expenses and losses related to financial reporting errors. Our bylaws require us to indemnify our current and former directors, officers, employees and agents against most actions of a civil, criminal, administrative or investigative nature.  Generally, we are required to advance indemnification expenses prior to any final adjudication of an individual*s culpability. The expense of indemnifying our current and former directors, officers and employees and agents and the related expenses as a result of any actions related to the internal investigation and financial restatement may be significant. Therefore, our indemnification obligations could result in the diversion of our financial resources and may adversely affect our business, financial condition and results of operations.
 
Risks Relating to Our Corporate Structure
 
Our corporate structure, in particular the VIE Agreements, are subject to significant risks, as set forth in the following risk factors.
 
PRC regulations relating to acquisitions of PRC companies by foreign entities may create regulatory uncertainties that could restrict or limit our ability to operate.  Our failure to obtain the prior approval of the China Securities Regulatory Commission (※CSRC§) for the trading of our common stock could have a material adverse effect on our business, operating results, reputation and trading price of our common stock.
 
The SAFE issued a public notice in November 2005, known as Circular 75, concerning the use of offshore holding companies in mergers and acquisitions in China.  The public notice provides that if an offshore company controlled by PRC residents intends to acquire a PRC company, such acquisition will be subject to registration with the relevant foreign exchange authorities.  The public notice also suggests that registration with the relevant foreign exchange authorities is required for any sale or transfer by the PRC residents of shares in an offshore holding company that owns an onshore company.  PRC residents must each submit a registration form to the local SAFE branch with respect to their ownership interests in the offshore company, and must also file an amendment to such registration if the offshore company experiences material events, such as changes in the share capital, share transfer, mergers and acquisitions, spin-off transactions or use of assets in China to guarantee offshore obligations.
 
On August 8, 2006, the PRC Ministry of Commerce (※ MOC §), joined by the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, the CSRC and SAFE, released a substantially amended version of the Provisions for Foreign Investors to Merge with or Acquire Domestic Enterprises (the ※ Revised M&A Regulations §), which took effect September 8, 2006.  The revised M&A Regulations include new provisions that purport to require that an offshore special purpose vehicle, or SPV, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals must obtain the approval of the CSRC prior to the listing and trading of such SPV*s securities on an overseas stock exchange.  On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings.  However, the application of this PRC regulation remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope and applicability of the CSRC approval requirement.
 
The PRC regulatory authorities may take the view that entry into the VIE Agreements by the WFOE and Guangdong Xingbang may constitute a de facto acquisition, because at the end of these transactions, Mr. Yao, a PRC resident becomes majority owner and effective controlling party of a foreign entity that acquired ownership of Guangdong Xingbang.   Our management believes that: (a) the establishment of the WFOE was duly approved by the local counterpart of Ministry of Commerce in Guangdong on May 6, 2011; (b) the offshore restructuring, establishment of WFOE and execution of the VIE Agreements and the transactions thereunder do not (i) contravene or circumvent any provision of applicable PRC laws and regulations, including without limitation, the Revised M&A Regulations, the Circular 75 and its implementing rules; or (ii) contravene the articles of association, business license or other constituent documents of WFOE or Guangdong Xingbang; (c) to its best knowledge, management is not aware of any issue, fact or circumstance which would lead them to believe that the PRC regulatory authorities would revoke the VIE Agreements and the transactions thereunder; and (d) the VIE Agreements are in compliance with and enforceable under the applicable PRC laws and regulations.
 
 
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If the PRC regulatory authorities take the view that the VIE Agreements constitute a de facto acquisition without the approval of the national offices of MOC, they could invalidate the VIE Agreements.  If we cannot obtain MOC approval in case we are required to do so, we may face regulatory actions or other sanctions from the MOC or other PRC regulatory agencies.  These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from future financings into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our common stock.
 
We did not obtain a legal opinion from PRC legal counsel with respect to our VIE arrangement. If our management*s understanding of the relevant PRC laws is incorrect and our corporate structure and the VIE Agreements are later determined by PRC government to be unenforceable, our results of operation may be materially adversely affected.
 
The VIE Agreements, designed to give us effective control of Guangdong Xingbang without having ownership in it, are governed by PRC laws.   We did not seek PRC legal counsel*s opinion or advice when we entered into these VIE Agreements with Guangdong Xingbang.  The PRC laws are complicated and fluid and there is no assurance that our understanding of the relevant PRC laws is accurate and up-to-date.  If our management*s understanding of the relevant PRC laws is incorrect and our corporate structure and the VIE Agreements are later determined by PRC government to be unenforceable, our results of operation may be materially adversely affected and we may have to negotiate new business terms with the Guangdong Xingbang Shareholders.
 
We depend upon the VIE Agreements in conducting our business in the PRC, which may not be as effective as direct ownership.
 
 The VIE Agreements may not be as effective in providing us with control over Guangdong Xingbang as direct ownership.  The VIE Agreements are governed by PRC laws and provide for the resolution of disputes through arbitration proceedings pursuant to PRC laws.  Accordingly, the VIE Agreements would be interpreted in accordance with PRC laws.  If Guangdong Xingbang or its shareholders fail to perform the obligations under the VIE Agreements, including but not limited to default in payment of consulting fees under the Consulting Services Agreement, we may have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, and there is a risk that we may be unable to obtain these remedies.  The legal environment in China is not as developed as in other jurisdictions.  As a result, uncertainties in the PRC legal system could limit our ability to enforce the VIE Agreements.
 
The pricing arrangement under the VIE Agreements may be challenged by the PRC tax authorities.
 
We could face adverse tax consequences if the PRC tax authorities determine that the VIE Agreements were not entered into based on arm*s length negotiations.  If the PRC tax authorities determine that the VIE Agreements were not entered into on an arm*s length basis, they may adjust the income and expenses of our company for PRC tax purposes which could result in higher tax liability.
 
We rely on the approval certificates and business license held by Guangdong Xingbang and any deterioration of the relationship between the WFOE and Guangdong Xingbang could materially and adversely affect the overall business operation of our company.
 
Pursuant to the VIE Agreements, our business will be undertaken on the basis of the approvals, certificates and business license as well as other requisite licenses held by Guangdong Xingbang.  The advertising and e-commerce industry in China is highly regulated by the PRC government and numerous regulatory authorities of the central PRC government are empowered to issue and implement regulations governing various aspects of the internet industry. See ※PRC Regulation.§ There is no assurance that Guangdong Xingbang will be able to renew its licenses or certificates when their terms expire with substantially similar terms as the ones they currently hold.
 
 
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Further, our relationship with Guangdong Xingbang is governed by the VIE Agreements, which are intended to provide us, through our indirect ownership of the WFOE, with effective control over the business operations of Guangdong Xingbang.  However, the VIE Agreements may not be effective in providing control over the applications for and maintenance of the licenses required for our business operations.  Guangdong Xingbang could violate the VIE Agreements, go bankrupt, suffer from difficulties in its business or otherwise become unable to perform its obligations under the VIE Agreements and, as a result, our operations, reputation, business and stock price could be severely harmed.
 
If the WFOE exercises the purchase option over Guangdong Xingbang*s equity pursuant to the VIE Agreements, the payment of the purchase price could materially and adversely affect the financial position of our company.
 
Under the VIE Agreements, the WFOE holds an option to purchase all or a portion of the equity of Guangdong Xingbang at a price, based on the capital paid in by the Guangdong Xingbang shareholders. In the case that applicable PRC laws and regulations require an appraisal of the equity interest or provide other restriction on the purchase price, the purchase price shall be the lowest price permitted under the applicable PRC laws and regulations. As Guangdong Xingbang is already a contractually controlled affiliate to our company, and already remits all of its net profits to us in the form of consulting service fees, the WFOE*s purchase of Guangdong Xingbang*s equity would result in a substantial cash payment from us to the Guangdong Xingbang Shareholders without any corresponding increase in our cash flow or increase in our book value.  Accordingly, payment of the purchase price could adversely affect the financial position of our company.
 
The shareholders of Guangdong Xingbang have potential conflicts of interest with us, which may adversely affect our business.
 
Guangdong Xingbang is jointly owned by Mr. Xiaohong Yao and Ms. Dongmei Zhong, who are husband and wife. Mr. Yao and Ms. Zhong also jointly own 56.25% of our common stock.  Mr. Yao and Ms. Zhong may not act completely in the best interests of us or our stockholders (as opposed to their personal interest) and there may be conflicts of interest which may not be resolved in our favor.  For example, Mr. Yao and Ms. Zhong may cause Guangdong Xingbang to delay the payment of consulting services fees to our company via the WFOE or they may cause Guangdong Xingbang to unlawfully terminate the VIE Agreements.  There may be conflicts of interest between their duties to us and their interests as the shareholders of Guangdong Xingbang. We cannot assure you that they will act entirely in our interests when conflicts of interest arise or that conflicts of interest will be resolved in our favor. In addition, Mr. Yao and Ms. Zhong could violate their non-competition or employment agreements with us or their legal duties by diverting business opportunities from us, resulting in our loss of corporate opportunities. If we are unable to resolve any such conflicts, or if we suffer significant delays or other obstacles as a result of such conflicts, our business and operations could be severely disrupted, which could materially and adversely affect our results of operations and damage our reputation.
  
PRC regulation of direct investment and loans by offshore holding companies to PRC entities may delay or limit us from making additional capital contributions or loans to our PRC subsidiaries.
 
Any capital contributions or loans that we, as an offshore entity, make to Guangdong Xingbang, are subject to PRC regulations. For example, none of our loans to Guangdong Xingbang may exceed the difference between its total amount of investment and its registered capital approved under relevant PRC laws, and the loans must be registered with the local branch of SAFE. Our capital contributions to Guangdong Xingbang must be approved by the Ministry of Commerce or its local counterpart. We cannot assure you that we will be able to complete the necessary registration or obtain the necessary approval on a timely basis, or at all. If we fail to complete the necessary registration or obtain the necessary approval, our ability to make loans or equity contributions to Guangdong Xingbang may be negatively affected, which could adversely affect Guangdong Xingbang*s liquidity and its ability to fund its working capital and expansion projects and meet its obligations and commitments.
 
 
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Risks Associated With Doing Business in China
 
There are substantial risks associated with doing business in China, as set forth in the following risk factors.
 
The Chinese government exerts substantial influence over the manner in which we must conduct our business activities.
 
We are dependent on our relationship with the local government in the province in which we operate our business.  Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership.  Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters.  The central or local governments of in the PRC jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.  Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
 
Future inflation in China may inhibit our ability to conduct business in China. In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation.  Rapid economic growth can lead to growth in the money supply and rising inflation.  If prices for our products rise at a rate that is insufficient to compensate for the rise in the costs of supplies, it may have an adverse effect on profitability.  These factors have led to the adoption by Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation.  High inflation may in the future cause Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.
  
Our operations and assets in China are subject to significant political and economic uncertainties.
 
Changes in PRC laws and regulations, or their interpretation, or the imposition of confiscatory taxation, restrictions on currency conversion, imports and sources of supply, devaluations of currency or the nationalization or other expropriation of private enterprises could have a material adverse effect on our business, results of operations and financial condition.  Under its current leadership, the Chinese government has been pursuing economic reform policies that encourage private economic activities and greater economic decentralization.  There is no assurance, however, that the Chinese government will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice.
 
We derive all of our revenues in China and a slowdown or other adverse developments in the PRC economy may materially and adversely affect our customers, demand for our products and our business.
 
All of our revenues are generated in China.  We anticipate that sales of our products in China will continue to represent all of our total sales in the near future.  Although the PRC economy has grown significantly in recent years, we cannot assure you that such growth will continue.  The industry in which we are involved in the PRC is relatively new and growing, but we do not know how sensitive we are to a slowdown in economic growth or other adverse changes in the PRC economy which may affect demand for our products.  In addition, the Chinese government also exercises significant control over Chinese economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.  Efforts by the Chinese government to slow the pace of growth of the Chinese economy could result in reduced demand for our products.  A slowdown in overall economic growth, an economic downturn or recession or other adverse economic developments in the PRC may materially reduce the demand for our products and materially and adversely affect our business.
 
 
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Currency fluctuations and restrictions on currency exchange may adversely affect our business, including limiting our ability to convert Chinese Renminbi into foreign currencies and, if Chinese Renminbi were to decline in value, reducing our revenue in U.S. dollar terms.
 
Our reporting currency is the U.S. dollar and our operations in China use their local currency as their functional currencies. Substantially all of our revenue and expenses are in Chinese Renminbi.  We are subject to the effects of exchange rate fluctuations with respect to any of these currencies.  For example, the value of the Renminbi depends to a large extent on Chinese government policies and China*s domestic and international economic and political developments, as well as supply and demand in the local market. Since 1994, the official exchange rate for the conversion of Renminbi to the U.S. dollar had generally been stable and the Renminbi had appreciated slightly against the U.S. dollar.  However, on July 21, 2005, the Chinese government changed its policy of pegging the value of Chinese Renminbi to the U.S. dollar.  Under the new policy, Chinese Renminbi may fluctuate within a narrow and managed band against a basket of certain foreign currencies. It is possible that the Chinese government could adopt a more flexible currency policy, which could result in more significant fluctuation of Chinese Renminbi against the U.S. dollar.  We can offer no assurance that Chinese Renminbi will be stable against the U.S. dollar or any other foreign currency. 
 
 
Our financial statements are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currencies denominated transactions results in reduced revenue, operating expenses and net income for our international operations. Similarly, to the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions results in increased revenue, operating expenses and net income for our international operations. We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign consolidated subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign consolidated subsidiaries* financial statements into U.S. dollars will lead to a translation gain or loss which is recorded as a component of other comprehensive income. Changes in the functional currency value of these assets and liabilities create fluctuations that will lead to a transaction gain or loss. We have not entered into agreements or purchased instruments to hedge our exchange rate risks, although we may do so in the future. The availability and effectiveness of any hedging transaction may be limited and we may not be able to hedge our exchange rate risks.

The State Administration of Foreign Exchange (※SAFE§) restrictions on currency exchange may limit our ability to receive and use our sales revenue effectively and to pay dividends.
 
All of our sales, revenues and expenses are denominated in the Chinese currency, Renminbi.  Under PRC law, the Renminbi is currently convertible under the ※current account,§ which includes dividends and trade and service-related foreign exchange transactions, but not under the ※capital account,§ which includes foreign direct investment and loans.  Currently, our PRC operating subsidiary, We, may purchase foreign currencies for settlement of current account transactions, including payments of dividends to us, without the approval of SAFE, by complying with certain procedural requirements.  However, the relevant PRC government authorities may limit or eliminate our ability to purchase foreign currencies in the future.  Since a significant amount of our future revenue will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to fund our business activities outside China that are denominated in foreign currencies.
 
SAFE restrictions may delay the payment of dividends, since we have to comply with certain procedural requirements and we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from the profits of WFOE.
 
Foreign exchange transactions by PRC operating subsidiaries continue to be subject to significant foreign exchange controls and require the approval of or need to register with PRC government authorities, including SAFE.  In particular, if we, or our PRC operating subsidiary, borrow foreign currency through loans from us or other foreign lenders, these loans must be registered with SAFE, and if we finance our operations by means of additional capital contributions, these capital contributions must be approved by certain government authorities, including the Ministry of Commerce, or their respective local counterparts.  These limitations could affect our ability to obtain foreign exchange through debt or equity financing.
 
 
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The PRC government also may at its discretion restrict access in the future to foreign currencies for current account transactions.  If the foreign exchange control system prevents us from obtaining foreign currency, we may be unable to pay dividends or meet obligations that may be incurred in the future that require payment in foreign currency.
   
Because our principal assets are located outside of the United States and a majority of our directors and our officers will reside outside of the United States, it may be difficult for you to enforce your rights based on the United States federal securities laws against us and our officers and directors in the United States or to enforce judgments of United States courts against us or them in the PRC.  In addition, it may be difficult for you to enforce judgments of United States courts against Guangdong Xingbang or our PRC resident directors and officers in the United States.

All of our board of directors and officers are outside of the United States. In addition, our operating subsidiary is located in the PRC and all of its assets are located outside of the United States. China does not have a treaty with United States providing for the reciprocal recognition and enforcement of judgments of courts. It may therefore be difficult for investors in the United States to enforce their legal rights based on the civil liability provisions of the United States federal securities laws against us in the courts of either the United States or the PRC and, even if civil judgments are obtained in courts of the United States, to enforce such judgments in the PRC courts. Further, it is unclear if extradition treaties now in effect between the United States and the PRC would permit effective enforcement against us or our officers and directors of criminal penalties, under the United States federal securities laws or otherwise.   In addition, an investor may have difficulty enforcing a judgment rendered by a United States court against foreign residents such as Guangdong Xingbang and our officers and directors who do not have assets in the United States.
 
We may have limited legal recourse under PRC laws if disputes arise under our contracts with third parties.
 
The Chinese government has enacted laws and regulations dealing with matters such as corporate organization and governance, foreign investment, commerce, taxation and trade.  However, their experience in implementing, interpreting and enforcing these laws and regulations is limited, and our ability to enforce commercial claims or to resolve commercial disputes is unpredictable.  If adverse circumstances arise from our business transactions, we face the risk that the parties may seek ways to terminate the transactions, or may hinder or prevent us from receiving the benefits or enforcing our rights in these transactions.  The resolution of these matters may be subject to the exercise of considerable discretion by agencies of the Chinese government, and forces unrelated to the legal merits of a particular matter or dispute may influence their determination. Any rights we may have to specific performance, or to seek an injunction under PRC laws, in either of these cases, are severely limited, and without a means of recourse by virtue of the Chinese legal system, we may be unable to prevent these situations from occurring.  The occurrence of any such events could have a material adverse effect on our business, financial condition and results of operations.  Although legislation in China over the past 30 years has significantly improved the protection afforded to various forms of foreign investment and contractual arrangements in China, these laws, regulations and legal requirements are relatively new and their interpretation and enforcement involve uncertainties, which could limit the legal protection available to us, and foreign investors, including you.  The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital and could have a material adverse impact on our operations.
 
We must comply with the Foreign Corrupt Practices Act.
 
We are required to comply with the United States Foreign Corrupt Practices Act, which prohibits U.S. companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Foreign companies, including some of our competitors, are not subject to these prohibitions.  Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time-to-time in mainland China.  If our competitors engage in these practices, they may receive preferential treatment from personnel of some companies, giving our competitors an advantage in securing business or from government officials who might give them priority in obtaining new licenses, which would put us at a disadvantage.  Although we inform our personnel that such practices are illegal, we can not assure you that our employees or other agents will not engage in such conduct for which we might be held responsible.  If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties.
  
 
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If we make equity compensation grants to persons who are PRC citizens, they may be required to register with SAFE.  We may also face regulatory uncertainties that could restrict our ability to adopt equity compensation plans for our directors and employees and other parties under PRC laws.
 
On April 6, 2007, SAFE issued the ※Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock Ownership Plan or Stock Option Plan of An Overseas Listed Company, also know as ※Circular 78.§  It is not clear whether Circular 78 covers all forms of equity compensation plans or only those which provide for the granting of stock options. For any plans which are so covered and are adopted by a non-PRC listed company, such as our company, after April 6, 2007, Circular 78 requires all participants who are PRC citizens to register with and obtain approvals from SAFE prior to their participation in the plan.  In addition, Circular 78 also requires PRC citizens to register with SAFE and make the necessary applications and filings if they participated in an overseas listed company*s covered equity compensation plan prior to April 6, 2007.  We believe that the registration and approval requirements contemplated in Circular 78 will be burdensome and time consuming.
 
In the future, we may adopt an equity incentive plan and make numerous stock option grants under the plan to our officers, directors and employees, some of whom are PRC citizens and may be required to register with SAFE. If it is determined that any of our equity compensation plans are subject to Circular 78, failure to comply with such provisions may subject us and participants of our equity incentive plan who are PRC citizens to fines and legal sanctions and prevent us from being able to grant equity compensation to our PRC employees. In that case, our ability to compensate our employees and directors through equity compensation would be hindered and our business operations and ability to attract and retain the most qualified employees, officers and directors may be adversely affected.
 
Due to various restrictions under PRC laws on the distribution of dividends by our PRC operating companies, we may not be able to pay dividends to our stockholders.
 
The Wholly-Foreign Owned Enterprise Law (1986), as amended and the Wholly-Foreign Owned Enterprise Law Implementing Rules (1990), as amended and the Company Law of the PRC (2006) contain the principal regulations governing dividend distributions by wholly foreign owned enterprises. Under these regulations, wholly foreign owned enterprises, such as the WFOE, may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. Additionally, the WFOE is required to set aside a certain amount of their accumulated profits each year, if any, to fund certain reserve funds.  These reserves are not distributable as cash dividends except in the event of liquidation and cannot be used for working capital purposes.   
 
Furthermore, if our consolidated subsidiaries in China incur debt on their own in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments. If we or our consolidated subsidiaries are unable to receive all of the revenues from our operations due to these contractual or dividend arrangements, our results of operations may be adversely affected.
 
We may have difficulty establishing adequate management, legal and financial controls required for a US publicly listed company.
 
Our management and our current board do not have experience in the management of public companies.  The PRC historically has been deficient in Western style management and financial reporting concepts and practices, as well as in modern banking, and other control systems.  We may have difficulty hiring and retaining a sufficient number of qualified employees to work in the PRC.  As a result of these factors, and especially given that we expect to be a publicly listed company in U.S. and subject to regulation as such, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet US public listed companies* standards.  We may have difficulty establishing adequate management, legal and financial controls in the PRC.  Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the Sarbanes-Oxley Act of 2002 and other applicable laws, rules and regulations.  This may result in significant deficiencies or material weaknesses in our internal controls which could impact the reliability of our financial statements and prevent us from complying with SEC rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002.  Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business and the public announcement of such deficiencies could adversely impact our stock price.
 
 
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Our lack of accounting personnel with education and experience in  U.S. GAAP is a material weakness in our internal control over financial reporting and could cause an oversight or delay in detecting a material misstatement of our annual or interim financial statements.
 
With the exception of Xingbang NV, none of our subsidiaries maintain their books and records in accordance with U.S. GAAP. Guangdong Xingbang, our only operating subsidiary, maintains its books and records in accordance with Chinese GAAP. Our Interim Chief Financial Officer, Mr. Song, and the accounting staff under his supervision are primarily responsible for preparing our books and records and converting such books and records into financial statements in accordance with US GAAP.  However, Mr. Song and the accounting staff under his supervision have limited knowledge of, and no prior experience in preparing financial statements in accordance with, U.S. GAAP.  Mr. Song also prepares the necessary disclosure in our periodic reports with the SEC.  None of Mr. Song and the other accountants is a U.S. certified public accountant or a certified management accountant, neither have they attended U.S. academic institutions or extended educational programs that would provide a sufficient relevant education in U.S. GAAP. Our management concluded this deficiency constitutes a material weakness in internal control over financial reporting as of September 30, 2011.   Such material weaknesses in our internal control over financial reporting could result in a material misstatement of our financial statements that may not be prevented or detected.  We are seeking to remedy this deficiency, although no assurance can be given as to when or to what extent we can obtain the necessary U.S. GAAP experience.
 
Compliance with changing regulation of corporate governance and public disclosure, and our management*s inexperience with such regulations will result in additional expenses and creates a risk of non-compliance.
 
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting.  Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.  In addition, our management is located in the PRC has little experience with compliance with U.S. laws (including securities laws).  This inexperience may cause us to fall out of compliance with applicable regulatory requirements, which could lead to enforcement action against us and a negative impact on our stock price.
 
If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.
 
We are subject to reporting obligations under the U.S. securities laws.  The SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring every public company to include a management report on such company*s internal controls over financial reporting in its annual report, which contains management*s assessment of the effectiveness of our internal controls over financial reporting.  In addition, an independent registered public accounting firm must attest to and report on management*s assessment of the effectiveness of our internal controls over financial reporting.   Our management may conclude that our internal controls over our financial reporting are not effective. Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may still decline to attest to our management*s assessment or may issue a report that is qualified if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.  Our reporting obligations as a public company will place a significant strain on our management, operational and financial resources and systems for the foreseeable future.  Effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to prevent fraud.  As a result, our failure to achieve and maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our stock.  Furthermore, we anticipate that we will incur considerable costs and use significant management time and other resources in an effort to comply with Section 404 and other requirements of the Sarbanes-Oxley Act.
 
 
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Regulation and censorship of information distribution over the internet in China may adversely affect our business, and we may be liable for information displayed on, retrieved from or linked to our website.
 
China has enacted laws and regulations governing internet access and the distribution of products, services, news, information, audio-video programs and other content through the internet. In the past, the PRC government has prohibited the distribution of information through the internet that it deems to be in violation of PRC laws and regulations. If any of our internet content were deemed by the PRC government to violate any content restrictions, we would not be able to continue to display such content and could become subject to penalties, including confiscation of income, fines, suspension of business and revocation of required licenses, which could materially and adversely affect our business, financial condition and results of operations. We may also be subject to potential liability for any unlawful actions of our customers or users of our website or for content we distribute that is deemed inappropriate. It may be difficult to determine the type of content that may result in liability to us, and if we are found to be liable, we may be prevented from operating our website in China.
 
Risks Related to Our Common Stock
 
We are not listed or quoted on any exchange and we may never obtain such a listing or quotation.
 
There is presently no public market in our common stock and there may never be a market for our common stock. Common stock held by our shareholders may have little or no value. We cannot guarantee that our common stock will be listed on a securities exchange or if a market for our stock will ever develop. Even if our common stock were quoted for sale, buyers may be insufficient in numbers to allow for a robust market, and therefore, it may prove impossible to sell your shares.
 
An active and visible trading market for our common stock may not develop.
 
We cannot predict whether an active market for our common stock will develop in the future.  In the absence of an active trading market:
 
 
investors may have difficulty buying and selling or obtaining market quotations;
 
 
market visibility for our common stock may be limited; and
 
 
a lack of visibility for our common stock may have a depressive effect on the market price for our common stock.
 
  
The trading price of the common stock is expected to be subject to significant fluctuations in response to variations in quarterly operating results, changes in analysts* earnings estimates, announcements of innovations by us or our competitors, general conditions in the industry in which we operate and other factors.  These fluctuations, as well as general economic and market conditions, may have a material or adverse effect on the market price of our common stock.
 
 
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The market price for our stock may be volatile.
 
The market price for our stock may be volatile and subject to wide fluctuations in response to factors including the following:
 
 
actual or anticipated fluctuations in our quarterly operating results;
 
 
changes in financial estimates by securities research analysts;
 
 
conditions in the markets in which we compete;
 
 
changes in the economic performance or market valuations of our competitors;
 
 
announcements by us or our competitors of new services, acquisitions, strategic partnerships, joint ventures or capital commitments;
 
 
addition or departure of key personnel;
 
 
fluctuations of exchange rates between RMB and the U.S. dollar;
 
 
intellectual property or other litigation; and
 
 
general economic or political conditions in China.
 
In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies.
 
Our common stock may be considered a ※penny stock,§ and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.
 
Our common stock, which we plan to have quoted for trading on the OTCBB, may be considered to be a ※penny stock§ if it does not qualify for one of the exemptions from the definition of ※penny stock§ under Section 3a51-1 of the Exchange Act, as amended.  Our common stock may be a ※penny stock§ if it meets one or more of the following conditions: (i) the stock trades at a price less than $5.00 per share; (ii) it is NOT traded on a ※recognized§ national exchange; (iii) it is not quoted on the Nasdaq Capital Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than $5 million.  The principal result or effect of being designated a ※penny stock§ is that securities broker-dealers participating in sales of our common stock will be subject to the ※penny stock§ regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act.  For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor*s account.  Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor.  This procedure requires the broker-dealer to: (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor*s financial situation, investment experience and investment objectives.  Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.
 
 
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We do not foresee paying cash dividends in the foreseeable future and, as a result, our investors* sole source of gain, if any, will depend on capital appreciation, if any.
 
We do not plan to declare or pay any cash dividends on our shares of common stock in the foreseeable future and currently intend to retain any future earnings for funding growth. As a result, investors should not rely on an investment in our securities if they require the investment to produce dividend income. Capital appreciation, if any, of our shares may be investors* sole source of gain for the foreseeable future. Moreover, investors may not be able to resell their common stock at or above the price they paid for them.

Volatility in the price of our common stock may subject us to securities litigation.
 
The market for our common stock may be characterized by significant price volatility, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management*s attention and resources.
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
Certain information contained in this Registration Statement on Form S-1 includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements herein which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently available to us and our management and our management's interpretation of what is believed to be significant factors affecting the businesses, including many assumptions regarding future events. Such forward-looking statements include statements regarding, among other things:
 
  our ability to generate commercial viability and acceptance of our services;
 
  our anticipated future sales and profitability;
 
  our future financing plans;
 
  our anticipated needs for working capital;
 
  our growth strategies, including success of our ju51 online shopping mall;
 
  the anticipated trends in our industry;
 
  our ability to expand our marketing capability;
 
  acquisitions of other companies or assets that we might undertake in the future;
 
  our operations in China and the regulatory, economic and political conditions in China; and
 
  competition existing today or that will likely arise in the future.
 
Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words "may," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. Actual results, performance, liquidity, financial condition, prospects and opportunities could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including the ability to raise sufficient capital to continue our operations. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" and matters described in this Current Report on Form 8-K generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained herein will in fact occur.
 
Potential purchasers of our common stock or other securities should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
 
USE OF PROCEEDS

This prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders named herein.  There will be no proceeds to us from the sale of shares of common stock in this offering.
 
DETERMINATION OF OFFERING PRICE

The selling stockholders may sell these shares in the over-the-counter market or otherwise, at market prices prevailing at the time of sale, at prices related to the prevailing market price, or at negotiated prices.  We will not receive any proceeds from the sale of shares by the selling stockholders.
 
MANAGEMENT*S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS
 
              The following discussion and analysis of our results of operations and financial condition should be read together with our combined and condensed financial statements and the notes thereto and other financial information, which are included elsewhere in this registration statement. Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles. In addition, our financial statements and the financial information included in this registration statement reflect our organizational transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods.
 
 
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This section contains forward-looking statements. These forward-looking statements are subject to various factors, risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Further, as a result of these factors, risks and uncertainties, the forward-looking events may not occur. Relevant factors, risks and uncertainties include, but are not limited to, those discussed in ※Business,§ ※Item 1A. Risk Factors§ and elsewhere in this registration statement. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management*s beliefs and opinions as of the date of this registration statement. We are not obligated to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. See ※Forward-Looking Statements.§
 
Overview and Strategy

We were formed as a Nevada corporation on April 12, 2011 to acquire operational control over Guangdong Xingbang. Since foreign investors are prohibited or restricted by the laws and regulations of the People*s Republic of China to operate the media and e-commerce business in China, we operate our business through ownership of the WFOE that provides management, consulting, investment and technical services to Guangdong Xingbang. We do not own any direct equity interest in Guangdong Xingbang. In May 2011, the WFOE entered into a series of contractual arrangements which effectively give the WFOE operational control over Guangdong Xingbang despite the lack of direct ownership. As a result of these contractual arrangements, we treat Guangdong Xingbang as a variable interest entity, or VIE, under U.S. generally accepted accounting principles, and we have included its historical financial results in our combined financial statements.
 
Our subsidiaries, Xingbang NV, Xingbang BVI and Xingbang HK are holding companies which do not have any operations or own any assets except for the ownership of the WFOE.  The only current operation of the WFOE is to provide consulting and management services to Guangdong Xingbang.  Currently, we solely rely on results of operations of Guangdong Xingbang.   If the PRC government declares the VIE agreements are not enforceable, we will not be able to exercise effective control over Guangdong Xingbang and combine the financial results of Guangdong Xingbang.  In such case, our results of operations and financial position will be materially adversely affected.

Guangdong Xingbang derives revenue primarily from three types of business: advertising revenue , revenue from consulting services provided to businesses and local governments in China and e-commerce related revenue derived from our ju51 Online Mall.  
 
We currently operate two newspapers, &Guzhen Lighting Weekly* and &China Ceramics Weekly*.  We also have online versions at www.lightcity.cn and www.taocicity.com , which have been integrated into our company*s primary website, www.ju51.com since April 2009.  We distribute the two newspapers for free and derive revenue from advertisements placed in them. According to data compiled by China Ranking, an institute which ranks Chinese businesses in various industries, we have the largest advertising revenue, the largest circulation and the most online visitors for the two newspapers, respectively, among comparable print industry newspapers targeted at the light and lighting industry and ceramics industry, respectively. To promote our ju51 online Mall more effectively, we combined the two newspapers together and distribute the integrated newspapers twice a month on Fridays beginning September 20, 2011. In addition to advertising revenue generated by the newspapers, we also provide consulting services to businesses in the lighting and ceramics industry, as well as consulting with local governments on how to further develop and regulate local business in the home furnishing and other industries.  The third revenue stream is e-commerce related revenue generated from the ju51 Mall which was launched on August 2, 2011.  The ju51 Mall is designed to assist the home furnishing businesses that are our clients to expand their sales channels. When fully constructed (expected to be mid-December 2011), the ju51 Mall is expected to have twelve marketplaces targeting twelve sectors in the home furnishing industry including light and lighting, ceramics, bath and toilet supplies, hardware, home textiles, closets, tiles and floor, doors and windows, furniture, home appliances, interior painting, and home d谷cor. As of November 11, 2011, 75 manufacturers in the light and lighting sector and 16 province-level distributors, covering 28 of 31 provinces in China, or so called ※channel service providers§, have signed agreements joining the ju51 Online Mall and 1,015 brick-and-mortar retailers have applied to open direct sale stores on the ju51 Mall. 

Our revenue highly correlates to the Chinese real estate market and is seasonal. Since January 2010, the Chinese government began to put forth policies restraining real estate growth and, as a result, the demand for home furnishings began to decrease in the fourth quarter of  2010. Manufacturers  and distributors cut their advertising and consulting budgets in the first quarter of 2011 and the decreased demand had a significant impact on our revenue and deferred revenue in the first three quarters  of 2011.  Management believes it is possible for the Chinese government to continue its policy to restrain high housing prices in the foreseeable future. Such policy is intended to incentivize consumers who previously were not able to afford the high home prices and spend on home furnishings.  Prior to the policy change, many apartments and houses were purchased by speculators who bought them and did not spend any money to furnish them.  We believe an increased number of home buyers buying for personal occupancy will lead to increased growth in the home furnishings market and we expect to see more aggressive marketing initiatives by the home furnishings industry in the future. Generally, the first half of the year is low season for the home furnishings market, as people generally do not decorate their home during this period because of wet weather and other factors, so our revenue in advertising, consulting, (except for consulting provided to local governments, and revenue generated by our ju51 Mall) is relatively low during this period.

 
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As part of our operation of the ju51 Mall, we will seek to capitalize on our relationship with distributors. We will engage the distributors, or ※channel service providers§, to develop potential advertising and consulting services clients and distribute our newspapers.  Distributors will receive commission based on the advertising and consulting services revenue generated by such distributor, and will be compensated for its distribution costs.   As a result of our expanded client base and distribution network, and our management*s resumption of efforts in advertising and consulting services, we believe the number of advertising and consulting services clients will increase along with advertising and consulting revenues in the foreseeable future.  
 
Critical Accounting Policies and Estimates

                 In preparing our combined and condensed combined financial statements in conformity with accounting principles generally accepted in the United States, we make estimates and assumptions that affect the accounting, recognition and disclosure of our assets, liabilities, stockholders* equity, revenues and expenses. We make these estimates and assumptions because certain information that we use is dependent upon future events, which cannot be calculated with a high degree of precision from data available or cannot be readily calculated based upon generally accepted methodologies. In some cases, these estimates are particularly difficult and therefore require a significant amount of judgment. Actual results could differ from the estimates and assumptions that we use in the preparation of our combined and condensed financial statements. Below is a summary of our most important accounting policies that may affect our combined and condensed financial statements.

Basis of Combination. Subsidiaries are entities (including special purpose entities) over which we have the power to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether we control another entity. Subsidiaries are fully consolidated from the date on which control is transferred to us, or combined in circumstances where retroactive effect is applied, from the beginning of the first period the financial statements are presented. They are excluded from consolidation from the date that control ceases. Intra-group transactions, balances and unrealized gains on transactions between our combined companies are eliminated in preparing our combined and condensed financial statements. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Business Combinations. Business combinations (other than for entities under common control) will be accounted for by applying the purchase method. This involves the revaluation at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the combined balance sheet at their fair values, which are also used as the bases for subsequent measurement in accordance with our accounting policies. Goodwill represents the excess of the cost of a business combination or an investment over our interest in the net fair value of the acquiree*s identifiable assets, liabilities and contingent liabilities. If the cost of acquisition is less than the fair value of the net identifiable assets of the subsidiary acquired, the difference would be recognized directly in the combined income statements.

Use of estimates. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
Cash and cash equivalents . For purposes of the statements of cash flows, cash and cash equivalents include cash on hand and demand deposits with a bank with a maturity of less than three months.

 
- 26 -

 
 
Accounts receivable . We extend unsecured credit to our individual customers in the ordinary course of business but mitigate the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on managements* assessment of the credit history with the customers and current relationships with them.

Property and equipment . Property and equipment are stated at cost, less accumulated depreciation. Expenditures for additions, major renewals and betterments are capitalized and expenditures for maintenance and repairs are charged to expenses as incurred.

Depreciation is provided on a straight-line basis, less estimated residual value over the assets* estimated useful lives.  The estimated useful lives are as follows:
 
 Leasehold improvements   3 Years
 Motor vehicle  5 Years
 Office equipment  5 Years
 
Website development costs . Website development costs are stated at cost, less accumulated amortization and are amortized over the assets* estimated useful lives of 10 years from the date the costs were incurred.

Long-lived assets . The Company accounts for long-lived assets under the FASB Codification Topic 360 (ASC Topic 360) ※Accounting for Goodwill and Other Intangible Assets§ and ※Accounting for Impairment or Disposal of Long-Lived Assets§. In accordance with ASC Topic 360, long-lived assets held and used by the Company are reviewed for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, when undiscounted future cash flows will not be sufficient to recover an asset*s carrying amount, the asset is written down to its fair value. The long-lived assets of the Company, which are subject to evaluation, consist primarily of property, plant and equipment and website development costs. For the years ended December 2010 and 2009, the Company has not recognized any allowances for impairment.

Fair value of financial instruments . ASC 820 Fair Value Measurements and Disclosures defines fair value as ※the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).§ The standard establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value measurements. ASC 820, among other things, requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Fair Value Hierarchy . ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1 每 Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2 每 Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 每 Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flows models and similar techniques.

Revenue recognition. We recognize revenues under ASC 605, Revenue Recognition when all of the following have occurred: persuasive evidence of arrangement with the customer, services have been performed, fees are fixed or determinable and collectability of the fees is reasonably assured.
 
 
- 27 -

 
 
Advertising. We publish two weekly newspapers, namely Guzhen Lighting Weekly and China Ceramic Weekly. The newspapers are distributed free of charge to manufacturers, dealers, accessory providers and decoration designers engaged in the lighting and ceramics industries in the PRC. Beginning September 20, 2011, the printing and publication of the two newspapers were combined together under the common cover named "ju51 Business Intelligence". The combined newspaper is distributed free of charge to general distributors engaged in the home furnishing industry in the PRC. We derive revenue from the sale of advertising space within the newspaper. Newspaper advertising contracts generally have a term of one year or less. The customers usually pay the fees in advance, which are recorded as deferred revenue under current liabilities. The advertising revenue is recognized as income when the advertisements are published in the newspapers or the related advertising services are rendered.
 
Consulting services. We provide various marketing consulting services to our clients in the PRC based on a negotiated fixed-price time contract. The clients usually pay the fees in advance when the contract is signed or before the commencement of work. We recognize these services-based revenues from contracts when (i) services are rendered; (ii) clients recognized the completion of services; and (iii) collectability is reasonably assured. Fees received in advance are recorded as deferred revenue under current liabilities.

E-Commerce. We provide various e-commerce services to our clients in the PRC based on a negotiated fixed-price time contract for use of our online platform. The clients usually pay the fees in advance when the contract is signed or before the use of our platform. We recognize these services-based revenues from contracts when (i) services are rendered; (ii) clients recognized the completion of services; and (iii) collectability is reasonably assured. Fees received in advance are recorded as deferred revenue under current liabilities.

Income taxes . Income taxes are accounted for under the asset and liability method in accordance with ASC 740-10. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company provides valuation allowances against the net deferred tax asset for amounts that are not considered more likely than not to be realized.

A tax position is recognized as a benefit only if it is ※more likely than not§ that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the ※more likely than not§ test, no tax benefit is recorded. The adoption had no effect on the Company*s financial statements.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the profit or loss, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
 
Foreign currency transactions . Our functional currency is Renminbi (※RMB§). Foreign currency transactions during the year are translated to the functional currency at the approximate rates of exchange on the dates of transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the approximate rates of exchange at that date. Non-monetary assets and liabilities are translated at the rates of exchange prevailing at the time the asset or liability was acquired. Exchange gains or losses are recorded in the statement of operations.
 
 
- 28 -

 
 
The financial statements are translated into United States Dollars (※US$§) using the closing rate method. The balance sheet items are translated into US$ using the exchange rates at the respective balance sheet dates. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the year. All exchange differences are recorded within equity.
 
Segments. ASC Topic 280, ※Segment Reporting,§ requires use of the ※management approach§ model for segment reporting. The management approach model is based on the way a company*s management organizes segments within the company for making operating decisions and assessing performance. We have determined we have three reportable segments, advertising consulting services, and e-commerce .

Results of Operations 〞Three Months Ended September 30, 2011 Compared to Three Months Ended September 30, 2010

The following table presents, for the periods indicated, our consolidated statement of operations information.

   
For the three months ended September 30,
 
   
2011
   
2010
 
   
(Consolidated and unaudited)
   
(Combined and unaudited)
 
Revenue
 
    Advertising
           
Lighting
 
$
254,424
   
$
674,037
 
Ceramics
   
32,635
     
101,021
 
 Subtotal
   
287,059
     
775,058
 
    Consulting service
   
317,901
     
533,278
 
  E-commerce
   
1,431,179
     
-
 
Total revenue
   
2,036,139
     
1,308,336
 
Cost of Revenue
 
Advertising
               
Lighting
   
123,489
     
113,232
 
Ceramics
   
85,051
     
65,726
 
    Subtotal
   
208,540
     
178,958
 
Consulting service
   
22,049
     
96,219
 
E-commerce
   
143,713
       
-
Total cost of revenue
   
374,302
     
275,177
 
Gross Profit
   
1,661,837
     
1,033,159
 
Operating Expenses
               
Selling, general and administrative expenses
   
777,164
     
511,941
 
Depreciation
   
29,705
     
26,413
 
Amortization
   
-
     
5,298
 
Total operating expenses, net
   
806,869
     
543,652
 
Net Income From Operation
   
854,968
     
489,507
 
Other Income(Expenses)
               
Interest income
   
997
     
647
 
Interest expenses
   
-
     
(16,457
)
Other income
   
923
     
3,667
 
Other expenses
   
(5,661
)
   
(746
)
Loss on disposal of property and equipment
   
(4,305
)
   
(13,560)
 
Total other expenses, net
   
(8,046
)
   
(26,449
)
Net Income Before Tax
   
846,922
     
463,058
 
Income Tax Expenses
   
(199,690)
     
(69,473)
 
Net Income
   
647,232
     
393,585
 
Other Comprehensive Income-Foreign currency translation gain
 
$
31,130
   
$
3,114
 
Comprehensive Income
 
$
678,362
   
$
396,699
 
Net Income Per Share-Basic and Diluted
 
$
0.01
   
$
0.00
 
Weighted Average Number of Shares Outstanding During the Year -Basic and Diluted
   
80,148,739
     
79,999,000
 
 
Revenue

During the three months ended September 30, 2011, we had total revenue of $2,036,139. Of this, $287,059 was attributable to revenue generated from advertising, $317,901 was attributable to consulting services rendered, and $1,431,179 was attributable to e-commerce. During the three months ended September 30, 2010, we had total revenue in the amount of $1,308,336. Of this, $775,058 was attributable to revenue generated from advertising, $533,278 was attributable to consulting services rendered, and $0 was attributable to e-commerce. The increase in our actual revenue from the three months ended September 30, 2010 to the three months ended September 30, 2011 was $727,803, or approximately 56%. The significant increase in revenue was the result of the increase in e-commerce revenue, which increased by $1,431,179, while revenue from advertising decreased 63% and revenue generated by consulting service decreased 40%. We believe the significant decrease in advertising and consulting service revenue was due to the real estate policy put forth by the Chinese government aforementioned in the ※Overview and Strategy§ section. Additionally, we put more effort on the development of the ju51 Mall during this period.

 
- 29 -

 
 
Cost of revenue

Cost of revenue is comprised of printing costs, editorial fees, agent fees, salaries of consulting service providers and e-commerce employees, amortization of website development costs, business taxes relating to advertising, consulting services and e-commerce service.

Cost of revenue for the three months ended September 30, 2011 was $374,302, as compared to $275,177 for the three months ended September 30, 2010, an increase of $99,125, or approximately 36%. The reason for the increase was the rise of cost of advertising, which was $29,582, or approximately 17%, and resulted mainly from the increase of printing costs as a result of the use of high quality printing paper, and the increase of cost in e-commerce, which increased by $143,713, while the cost of consulting services decreased by $74,170, or approximately 77%, which resulted from a decrease in consulting service revenue, dropping $215,377, or approximately 40%.
 
Gross profit

Gross profit was $1,661,837 for the three months ended September 30, 2011, an increase of $628,678, or approximately 61%, compared to gross profit of $1,033,159 for the three months ended September 30, 2010. The reason for the increase was primarily attributable to the provision of e-commerce services in the third quarter of 2011.
 
Operating expenses

Operating expenses consist of selling, general and administrative expense, amortization and depreciation.

Operating expenses for the three months ended September 30, 2011 were $806,869, including $777,164  in general, selling and administrative expenses, $29,705  in depreciation and $0  in amortization. Operating expenses for the three months ended September 30, 2010 were $543,652, consisting of $511,941 in general, selling and administrative expenses, $26,413 in depreciation, and $5,298 in amortization. The increase in operating expenses from the three months ended September 30, 2010 to the three months ended September 30, 2011 was $263,217, or approximately 48%. Of this, selling, general and administrative expenses increased $265,223, or approximately 52%, depreciation increased $3,292, or approximately 12%, and amortization decreased $5,298, or approximately100%.
 
Other expenses, net

Other expenses, net consist mainly of net interest income and other income, interest expense and loss on disposal of property and equipment.

Other expenses, net for the three months ended September 30, 2011 was $8,046 as compared to $26,449 for the three months ended September 30, 2010, a decrease of $18,403, or approximately 70%. The decrease in other expenses, net was primarily attributable to the decrease of interest expenses, which decreased by $16,457, or approximately 100%. The reason for the significant decrease in interest expenses was that we repaid a bank loan of $302,948 in April 2011.
 
Income tax expenses

Income tax expenses were $199,690 for the three months ended September 30, 2011, as compared to income tax expenses of $69,473 for the three months ended September 30, 2010. The increase in income tax expenses was mainly attributable to the increase in net income before taxes, which increased by $383,864, or approximately 83%. Our effective income tax rate was 15% for 2011 and 2010, because we were qualified as a ※New or High Technology Enterprise§ under PRC laws, a designation which is subject to review every year.

 
- 30 -

 
 
Net Income
 
Net income was $647,232 and $393,585 for the three months ended September 30, 2011 and  2010, respectively, an increase of $253,647, or approximately 64%. The increase was the result of provision of e-commerce services in the third quarter of 2011.
 
Other comprehensive income
 
Other comprehensive income was $31,130 and $3,114 for the three months ended September 30, 2011 and 2010, respectively, an increase of $28,016, or approximately 900%. The reason for the increase was the rise in foreign currency translation gains, primarily caused by the increase in the RMB to U.S. dollar exchange rate in 2011 compared to 2010.

Results of Operations 〞Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

The following table presents, for the periods indicated, our consolidated statement of operations information.

   
For the nine months ended September 30,
 
   
2011
   
2010
 
   
(Consolidated and unaudited)
   
(Combined and unaudited)
 
Revenue
 
    Advertising
           
Lighting
 
$
777,948
   
$
2,265,703
 
Ceramics
   
71,758
     
314,497
 
 Subtotal
   
849,706
     
2,580,200
 
    Consulting service
   
1,386,771
     
984,380
 
  E-commerce
   
1,431,179
     
-
 
Total revenue
   
3,667,656
     
3,564,580
 
Cost of Revenue
 
Advertising
               
Lighting
   
333,885
     
413,725
 
Ceramics
   
258,597
     
249,653
 
    Subtotal
   
592,482
     
663,378
 
Consulting service
   
163,400
     
223,692
 
E-commerce
   
143,713
       
-
Total cost of revenue
   
899,595
     
887,070
 
Gross Profit
   
2,768,061
     
2,677,510
 
Operating Expenses
               
Selling, general and administrative expenses
   
2,373,736
     
2,161,039
 
Depreciation
   
85,599
     
80,856
 
Amortization
   
9,718
     
13,938
 
Total operating expenses, net
   
2,469,053
     
2,255,833
 
Net Income From Operation
   
299,008
     
421,677
 
Other Income(Expenses)
               
Interest income
   
2,523
     
2,181
 
Interest expenses
   
(6,293
)
   
(31,979
)
Other income
   
2,605
     
4,449
 
Other expenses
   
(10,730
)
   
(3,142
)
Loss on disposal of property and equipment
   
(5,751
)
   
(13,560)
 
Total other expenses, net
   
(17,646
)
   
(42,051
)
Net Income Before Tax
   
281,362
     
379,626
 
Income Tax Expenses
   
(163,457)
     
(56,958)
 
Net Income
   
117,905
     
322,668
 
Other Comprehensive Income-Foreign currency translation gain
 
$
46,971
   
$
1,217
 
Comprehensive Income
 
$
164,876
   
$
323,885
 
Net Income Per Share-Basic and Diluted
 
$
0.00
   
$
0.00
 
Weighted Average Number of Shares Outstanding During the Year -Basic and Diluted
   
80,040,641
     
79,999,000
 
 
 
 
- 31 -

 

 
Revenue

During the nine months ended September 30, 2011, we had total revenue of $3,667,656. Of this, $849,706 was attributable to revenue generated from advertising, $1,386,771 was attributable to consulting services rendered, and $1,431,179 resulted from e-commerce. During the nine months ended September 30, 2010, we had total revenue of $3,564,580. Of this, $2,580,200 was attributable to revenue generated from advertising, $984,380 was attributable to consulting services rendered, and $0 was generated from e-commerce. The increase in our actual revenue from the nine months ended September 30, 2010 to the nine months ended September 30, 2011 was $103,076, or approximately 3%. The increase in revenue was the result of the increase in consulting service revenue and e-commerce revenue, which increased by $402,391 and $1,431,179, respectively. The reason for the increase in revenue from consulting services was that we changed our service offerings in the first three quarters of 2011 when we put more effort on consulting services.

The revenue in advertising decreased sharply, which decreased by $1,730,494, or approximately 67%. We believe the reason for the decrease in advertising revenue was due to the real estate policy put forth by the Chinese government aforementioned in the ※Overview and Strategy§ section.
 
Cost of revenue

Cost of revenue is comprised of printing costs, editorial fees, agent fees, salaries of consulting service providers and e-commerce employees, amortization of website development costs, business taxes relating to advertising, consulting services and e-commerce services.

Cost of revenue for the nine months ended September 30, 2011 was $899,595, as compared to $887,070 for the nine months ended September 30, 2010, an increase of $12,525, or approximately 1%. The reason for the increase was the rise of cost of e-commerce, which was $143,713. By comparison, the cost of advertising decreased by $70,896, or approximately 11%, from $663,378 for the nine months ended September 30, 2010 to $592,482 for the nine months ended September 30, 2011. The reason for the decrease was the result of a decrease in advertising revenue.
 
Gross profit

Gross profit was $2,768,061 for the nine months ended September 30, 2011, an increase of $90,551, or approximately 3%, compared to gross profit of $2,677,510 for the nine months ended September 30, 2010. The reason for the increase was primarily due to the increase in consulting service revenue and the provision of e-commerce services in the third quarter of 2011.
 
Operating expenses

Operating expenses consist of selling, general and administrative expense, amortization and depreciation.

Operating expenses for the nine months ended September 30, 2011 were $2,469,053, including $2,373,736 in general, selling and administrative expenses, $85,599 in depreciation and $9,718 in amortization. Operating expenses for the nine months ended September 30, 2010 were $2,255,833, consisting of $2,161,039 in general, selling and administrative expenses, $80,856 in depreciation, and $13,938 in amortization. The increase in operating expenses from the nine months ended September 30, 2010 to the nine months ended September 30, 2011 was $213,220, or approximately 9%. Of this, selling, general and administrative expenses increased $212,697, or approximately 10%, depreciation increased $4,743, or approximately 6%, and amortization decreased $4,220, or approximately 30%.

 
- 32 -

 
 
Other expenses, net

Other expenses, net consist mainly of net interest income and other income, interest expense and loss on disposal of property and equipment.

Other expenses, net for the nine months ended September 30, 2011 was $17,646 as compared to $42,051 for the nine months ended September 30, 2010, a decrease of $24,405, or approximately 58%. The decrease in other expenses, net was primarily attributable to the decrease of interest expenses, which decreased by $25,686, or approximately 80%. The reason for the significant decrease in interest expenses was that we repaid a bank loan of $302,948 in April 2011.
 
Income tax expenses

Income tax expenses were $163,457 for the nine months ended September 30, 2011, as compared to $56,958 for the nine months ended September 30, 2010. The increase in income tax expenses was mainly attributable to the increase in non deductible operating expenses in 2011. Such expenses consist of auditing, counsel and other expenses in relation to filings with the SEC. Our effective income tax rate was 15% for 2011 and 2010, because we were qualified as a ※New or High Technology Enterprise§ under PRC laws, a designation which is subject to review every year.
 
Net Income
 
Net income was $117,905 and $322,668 for the nine months ended September 30, 2011 and 2010, respectively. The decrease of net income was the result of decrease in advertising revenue, increase in cost of revenue, and operating expenses.
 
Other comprehensive income
 
Other comprehensive income was $46,971 and $1,217 for the nine months ended September 30, 2011 and 2010, respectively. The reason for the increase was the rise in foreign currency translation gains, primarily caused by the increase in the RMB to U.S. dollar exchange rate in 2011 compared to 2010.
 
 
- 33 -

 

 
Results of Operations 〞 Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

The following table presents, for the years indicated, our combined statement of operations information.
 
   
For the Years ended December 31,
 
   
2010
   
2009
 
Revenue
 
    Advertising
           
Lighting
 
$
2,987,153
   
$
3,177,348
 
Ceramics
   
483,340
     
214,829
 
 Subtotal
   
3,470,493
     
3,392,177
 
    Consulting service
   
1,756,188
     
1,289,473
 
Total revenue
   
5,226,681
     
4,681,650
 
Cost of Revenue
 
Advertising
               
Lighting
   
544,753
     
698,760
 
Ceramics
   
333,441
     
360,068
 
    Subtotal
   
878,194
     
1,058,828
 
Consulting service
   
303,294
     
161,365
 
Total cost of revenue
   
1,181,488
     
1,220,193
 
Gross Profit
   
4,045,193
     
3,461,457
 
Operating Expenses
               
Selling, general and administrative expenses
   
2,703,334
     
2,790,326
 
Amortization
   
18,706
     
11,246
 
Depreciation
   
107,856
     
111,569
 
Total operating expenses, net
   
2,829,896
     
2,913,141
 
Net Income From Operation
   
1,215,297
     
548,316
 
Other Income(Expenses)
               
Interest income
   
2,605
     
2,390
 
Interest expenses
   
(36,608
)
   
(38,964
)
Other income
   
6,620
     
242
 
Other expenses
   
(3,977
)
   
(9,503
)
Loss on disposal of property and equipment
   
(15,631
)
   
-
 
Total other expenses, net
   
(46,991
)
   
(45,835
)
Net Income Before Tax
   
1,168,306
     
502,481
 
Income Tax Expenses
   
(123,942
)
   
(14,728
)
Net Income
   
1,044,364
     
487,753
 
Other Comprehensive Income-Foreign currency translation gain (loss)
 
$
19,269
   
$
(610
)
Comprehensive Income
 
$
1,063,633
   
$
487,143
 
Net Income Per Share-Basic and Diluted
 
$
0.01
   
$
0.01
 
Weighted Average Number of Shares Outstanding During the Year -Basic and Diluted
   
79,999,000
     
79,999,000
 
 
Revenue

During the year ended December 31, 2010, we had total revenue of $5,226,681. Of this, $3,470,493 was attributable to revenue generated from advertising, and $1,756,188 was attributable to consulting services rendered. During the year ended December 31, 2009, we had total revenue in the amount of $4,681,650. Of this, $3,392,177 was attributable to revenue generated from advertising, and $1,289,473 was attributable to consulting services rendered. The increase in our actual revenue from the year ended December 31, 2009 to the year ended December 31, 2010 was $545,031, or approximately 11.64%. The increase in revenue was the result of more consulting services rendered and the increase of advertising in China Ceramics Weekly. The decrease of advertising revenue generated by Guzhen Lighting Weekly was the result that we put more effort on promoting consulting service to our customers.

 
- 34 -

 
 
Cost of revenue

Cost of revenue is comprised of printing cost, editorial fee, agent fee, salaries of consulting service providers and business tax relating to advertising and service rendered.

Cost of revenue for the year ended December 31, 2010 was $1,181,488, as compared to $1,220,193 for the year ended December 31, 2009, a decrease of $38,705, or approximately 3.2%. The reason for the decrease was the drop of cost of advertising, which was $180,634, or approximately 17%. The cost of consulting services increased from $161,365 in 2009 to $303,294 in 2010, an increase of $141,929, or approximately 88%, which was attributable to the increase in salaries as well as business tax and surcharges in generating consulting revenue.

Gross profit

Gross profit was $4,045,193 in 2010, an increase of $583,736, or approximately 16.9%, compared to gross profit of $3,461,457 in 2009. The reason for the increase was due to the increase in consulting revenue and advertising revenue generated by China Ceramics Weekly, and the decrease in cost of advertising.

Operating expenses

Operating expenses consist of selling, general and administrative expense, amortization and depreciation.

Operating expenses for the year ended December 31, 2010 were $2,829,896, including $2,703,334 in general, selling and administrative expenses, $18,706 in amortization and $107,856 in depreciation. Operating expenses for the year ended December 31, 2009 were $2,913,141, composed of $2,790,326 in general, selling and administrative expenses, $11,246 in amortization, and $111,569 in depreciation. The decrease in operating expenses from the year ended December 31, 2009 to the year ended December 31, 2010 was $83,245, or approximately 2.9%. Of this, selling, general and administrative expenses decreased $86,992, or approximately 3.1%, amortization increased $7,460, or approximately 66%, and depreciation decreased $3,713, or approximately 3.3%.

Other expenses, net

Other expenses, net, consist mainly of net of interest income and other income, interest expense and loss on sale of property and equipment.

Other expenses, net for the year ended December 31, 2010 were $46,991 as compared to $45,835 for the year ended December 31, 2009, an increase of $1,156, or approximately 2.5%. The increase in other expenses, net was primarily attributable to the increase of loss on sale of property and equipment which was $15,631.

Income tax expense

Income tax expense was $123,942 for the year ended December 31, 2010, as compared to $14,728 for the year ended December 31, 2009. The increase in income tax expense was mainly attributable to the increase of revenue, decrease in cost of revenue and operating expense, net. Our effective income tax rate was 15% for the year 2010 and 2009, because we were qualified as a ※New or High Technology Enterprise§ under PRC laws, which was subject to review every year.

Net income

Net income was $1,044,364 and $487,753 for the year ended December 31, 2010 and 2009, respectively. The increase was the result of increase in revenue, decrease in cost of revenue, and operating expense.

Other comprehensive income

Other comprehensive income was $19,269 for the year ended December 31, 2010 and other comprehensive loss was $620 for the year ended December 31, 2009. The increase in foreign currency translation gains was primarily caused by the increase in the RMB to U.S. dollar exchange rate in 2010 compared to 2009.

 
- 35 -

 
 
Liquidity and Capital Resources

Cash and cash equivalents

Cash and cash equivalents consist primarily of cash on hand and demand deposits at a bank. We had $1,014,615, $737,939 and $713,593 of cash and cash equivalents on hand as of September 30, 2011, December 31, 2010 and December 31, 2009, respectively. There was an increase of $276,676 in our cash and cash equivalents from December 31, 2010 to September 30, 2011, which was largely attributable to the increase of net cash provided by investing activities and net cash provided by financing activities.

The increase in our cash and cash equivalents from December 31, 2010 to December 31, 2009 was largely attributable to a decrease in net cash provided by operating activities, net cash used in investing activities, which was $318,241 and $875,297, respectively, and increase of net cash used in financing activities, which was $428,774, on a period-to-period basis.

We require cash for working capital, capital expenditures, repayment of debt, salaries, commissions and related benefits and other operating expenses and income taxes. We expect that our working capital needs will increase for the foreseeable future, as we continue to develop and grow our business. See ※Business 〞 General.§

The following table summarizes our cash flows for the nine months ended September 30, 2011 and 2010:
   
For the Nine Months Ended September 30,
 
  (Unaudited)
 
2011
   
2010
 
Net cash provided by (used in) operating activities
  $ (843,749 )   $ 355,010  
Net cash provided by (used in) investing activities
  $ 1,044,048     $ (227,913 )
Net cash provided by (used in) financing activities
  $ 32,202     $ (330,324 )


Net Cash Provided by (Used In) Operating Activities. Net cash used in operating activities was $843,749 for the nine months ended September 30, 2011, and net cash provided by operating activities was $355,010 for the nine months ended September 30, 2010. The most significant items affecting the comparison of our operating cash flow for the nine months ended September 30, 2011 and 2010 are summarized below:

 
Decrease in cash from operations-- Our net income from operations, excluding depreciation and amortization, was $218,174 and $417,462 for the nine months ended September 30, 2011 and 2010, respectively.
 
 
Increase in accounts receivable-- Accounts receivable increased $1,389,245 for the nine months ended September 30, 2011, while they decreased by $21,182 for the same period in 2010.
 
 
Changes in other payables and accrued expenses--Other payables and accrued expenses   increased by $400,730 during the nine months ended September 30, 2011, while they decreased by $731,609 for the same period in 2010. Other payables and accrued expenses consisted of accrued wages, business and other taxes payable, other payables, receipt in advance and accrued professional fees.
 
 
Changes in deferred revenue--Deferred revenue decreased by $117,377 for the nine months ended September 30, 2011, while they increased by $606,135 for the same period in 2010. The reason for the changes was that we entered into fewer agreements for advertising and consulting services in the first nine months of 2011, compared to the same period in 2010. We believe the significant decrease in the number of contracts for advertising and consulting services was due to the fact that the Chinese government put forth the policy of restraining high housing prices in January 2010, and that such policy had an adverse effect on the home furnishings market since the fourth quarter of 2010. As a result of such policies, manufacturers and distributors cut their advertising budgets in the first nine months of 2011.  Additionally, we focused our efforts on the preparation and development of our ju51 Mall during this time, and due to our limited management capacity, we were not able to continue to put the same amount of effort in the development and marketing of our advertising. Management believes it is possible for the Chinese government to continue its policy to restrain high housing prices in the foreseeable future. Such policy is intended to keep housing prices at reasonable and affordable levels so that consumers who previously were not able to afford home ownership will be able to purchase homes and spend on home furnishings.  As part of our operation of the ju51 Mall, we will seek to capitalize on our relationship with distributors. We intend to engage the distributors, or ※channel service providers§, to develop potential advertising and consulting services clients and distribute our newspapers. In addition, we believe the ju51 Mall will increase our advertising business. As a result of our expanded client base and distribution network, and our management*s resumption of efforts in advertising and consulting services, we believe the number of advertising and consulting services clients will increase along with the advertising and consulting revenues in the foreseeable future.
 
 
- 36 -

 
 
Net Cash Provided by (Used in) Investing Activities. Our investing activities provided cash of $1,044,048 for the nine months ended September 30, 2011 and used cash of $227,913 for the same period in 2010. This change was primarily due to the repayment of amounts due to us from related companies.
 
Net Cash Provided by (Used in) Financing Activities. Net cash provided by financing activities was $32,202 for the nine months ended September 30, 2011. Net cash used in financing activities was $330,324 for the nine months ended September 30, 2010. The reason for the change was that we raised $297,291 through a private placement of our securities on October 20, 2011. 
 
The following table summarizes our cash flows for the years ended December 31, 2010 and 2009:
 
   
For the Years Ended December 31,
 
   
2010
   
2009
 
Net cash provided by operating activities
 
$
680,102
   
$
998,343
 
Net cash used in investing activities
 
$
(300,459
)
 
$
(1,175,756
)
Net cash provided by financing activities
 
$
(379,658
)
 
$
49,116
 

Net Cash Provided by Operating Activities. Net cash provided by operating activities decreased from $1 million to $0.7 million. The most significant items affecting the comparison of our operating cash flow for the years ended December 31, 2010 and 2009 are summarized below:

 
Improvement in cash income from operations--Our income from operations, excluding depreciation and amortization, increased by approximately $0.7 million on a period-to-period basis, from approximately $0.61 million in 2009 to $1.17 million in 2010, which positively impacted our cash flows from operations.

 
Declined increase in deferred revenue --Deferred revenue decreased by $55,259 in 2010, while they increased by approximately $0.35 million in 2009.

 
Decrease in other payables and accrued expenses--Other payables and accrued expenses decreased by approximately $0.53 million in 2010, while they increased by $5,018 in 2009. Other payables and accrued expenses consisted of accrued welfare, accrued expense, receipts in advance, other tax payable, other payable and accrued wages. The decrease in other payables and accrued expenses was the result of the decrease in accrued salaries and staff welfare, rental payable to stockholders and advances from customers, which decreased $319,977, $110,743 and $144,644, respectively, as these were paid on or before December 31, 2010.
 
 
- 37 -

 

 
Net Cash Used in Investing Activities. Our investing activities for the years ended December 31, 2010 and 2009 used cash of $0.3 million and $1.2 million, respectively. This improvement in cash used by investing activities was largely caused by a decrease of $0.61 million due from related companies, of $111,217 in website development, and of $142,149 due from a director, respectively, on a period-to-period basis.
 
Net Cash Provided by Financing Activities. The most significant items affecting the comparison of our cash flows provided by financing activities for the years ended December 31, 2010 and 2009 are summarized below:
 
 
Bank loan borrowed--In June 2010, Guangdong Xingbang borrowed RMB5,000,000 ($738,596) from Shenzhen Development Bank (the ※June 2010 Bank Loan §). The June 2010 Bank Loan bears an interest rate of the then effective prime rate announced by the People*s Bank of China (※PBOC§) plus 10% of the prime rate per annum, and is collateralized by certain property owned by Mr. Yao and Ms. Zhong.  The loan was paid in full on April 15, 2011.
 
 
Bank loan repaid -- Guangdong Xingbang repaid RMB 3,000,000 ($443,158) of the June 2010 Bank Loan in September 2010.
 
 
Repayment of existing amounts due to our stockholders -- In April 2010, Guangdong Xingbang repaid RMB 3,316,780 ($489,952) to Mr. Yao and Ms. Zhong.
 
From time to time, the Guangdong Xingbang Shareholders and entities controlled by Mr. Yao borrow funds from Guangdong Xingbang.  Guangdong Xingbang borrows funds from the Guangdong Xingbang Shareholders from time to time when it is short of cash for operations.  All of the related party loans have been paid off as of the date of this S-1 and we do not intend to make such loans in the future absent a reasonable business purpose. The Audit Committee will be reviewing all related party transactions and will determine, on a case by case basis, what constitutes a ※reasonable business purpose§ pursuant to the authority the Board grants to the Audit Committee.
 
Capital Resources

We had working capital of $811,505 and $413,912 as of September 30, 2011 and December 31, 2010, respectively, and negative working capital of approximately $680,401 as of December 31, 2009. The reason for the increase from December 31, 2010 to September 30, 2011was primarily due to the decrease in amounts due from related companies and notes payable, and the increase in cash and cash equivalents, accounts receivable, and other payables and accrued expenses. The reason for the negative working capital  in 2009 was primarily attributed to the increase in due to a related company, due to stockholders, and deferred revenue which increased by $201,737, $485,818 and $353,449, respectively, compared with the amounts as of December 31, 2008. The amount due to a related company was certain amounts owed by Guangdong Xingbang to Zhongshan Xingbang, a company under common control of Mr. Yao. The amount due to stockholders was repaid by us in July 2010.
 
Under the VIE Agreements, Guangdong Xingbang pays the WFOE a consulting service fee, payable in RMB each quarter, equivalent to all of its net income for such quarter based on its quarterly financial statements, prepared in accordance with generally accepted accounting principles of the PRC. The WFOE then may transfer the cash payment to the offshore holding companies (Xingbang HK, Xingbang BVI and Xingbang NV) via dividend payment, after deduction of relevant taxes.   If we obtain funds through financing in the US, Xingbang HK may invest in the WFOE.  It is generally prohibited for PRC resident enterprises, including foreign owned entities, to make inter-company loans.  However, management believes it is in compliance with current PRC law for the WFOE to deposit the funds into a PRC bank account and request the PRC bank to lend the funds to Guangdong Xingbang.
 
 
- 38 -

 

 
We are a holding company with no significant revenue-generating operations of our own, and thus any cash flows from operations are and will be generated by Guangdong Xingbang through our WFOE*s existing consulting services management arrangement with Guangdong Xingbang. Our ability to service our debt and fund our ongoing operations is dependent on the results of these operations and their ability to provide us with cash. The WFOE*s ability to make loans or pay dividends are restricted under PRC law and may be restricted under the terms of future indebtedness, its governing documents or other agreements. Based upon the cash on hand, anticipated cash to be received from our operations and the expected availability of cash from Guangdong Xingbang*s shareholders, we believe that our sources of liquidity will be sufficient to enable us to meet our cash needs for at least the next 12 months.  Nonetheless, our liquidity and capital position could be adversely affected by:

  
Loss of revenue from advertising, consulting service or from the ju51 Online Mall, which was opened on August 2, 2011;

  
Guangdong Xingbang*s delay or discontinuance of  payment of consulting fees under the VIE agreements;

  
the change of policy on accounts receivable;

  
the enactment of new laws and regulations;

  
our inability to grow our business as we anticipate by expanding our existing advertising, consulting service and operation of the new e-commerce business;

  
any other changes in the cost structure of our underlying business model; and

  
any of the other risks and uncertainties described in ※Item 1A. Risk Factors.§

Debt Obligations

The following is a summary of amounts outstanding under our debt obligations as of September 30, 2011, December 31, 2010 and December 31, 2009.
 
   
September 30,
   
December 31
   
December 31
 
(in US dollar)
 
2011
   
2010
   
2009
 
Due to related company
   
14,730
     
18,775
     
201,737
 
Due to stockholders
   
-
     
-
     
485,818
 
Loan agreement note payable
   
-
     
302,948
     
-
 
Total debt
   
14,730
     
321,723
     
687,555
 
 
Due to related company
 
As of September 30, 2011, December 31, 2010 and December 31, 2009, Guangdong Xingbang owed Zhongshan Xingbang $14,730, $18,775 and $201,737 respectively under an unsecured, interest-free, demand loan.   Zhongshan Xingbang Purchase & Exhibition Service Co., Ltd. is an entity controlled by Mr. Xiaohong Yao, our Chairman of the Board, CEO and President.  As of September 30, 2011, China Xingbang Industry Investment Group Limited (※Xingbang Investment§) owed Guangdong Xingbang RMB22,410 ($3,514) under an interest-free, unsecured, demand loan. Xingbang Investment is an entity controlled by Mr. Xiaohong Yao, our Chairman of the Board, CEO and President.
 
Due to stockholders
 
As of September 30, 2011, December 31, 2010 and December 31, 2009, Guangdong Xingbang owed Mr. Yao and Ms. Zhong $0, $0 and $485,818, respectively.

 
- 39 -

 
 
 
Loan agreement
 
As of June 7, 2010, Guangdong Xingbang borrowed RMB5,000,000 ($738,596), at the interest rate of PBOC*s then effective prime rate plus 10% of the prime rate per annum from Shenzhen Development Bank (the ※June 2010 Bank Loan*). The June 2010 Bank Loan had a one-year term. In September 2010, Guangdong Xingbang repaid RMB3,000,000 ($443,158) to the bank, and then repaid the remaining RMB2,000,000 ($302,948) in April 2011.
 
Off-Balance Sheet Arrangements
 
As of November 11, 2011, 16 channel service providers have entered into agreements to join the ju51 Mall which covers 28 of 31 provinces in China. 1,015 direct stores and 75 flagship stores have also entered into agreements to join ju51 Mall. As of December 31, 2010 and December 31, 2009, we did not have any off-balance sheet obligations involving unconsolidated subsidiaries that provide financing or potentially expose us to unrecorded financial obligations. All of our obligations with respect to Guangdong Xingbang have been presented on our combined balance sheets as of each such date.
 
In order for the ju51 Mall to be more competitive, on October 10, 2011, we decided to update our business model and change the time and method of collecting revenue from direct sale stores and flagship stores. Please refer to ※Products and Services§ section of ※Business§ for more details.
 
Recently Issued Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRS")." This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. This pronouncement is effective for reporting periods beginning on or after December 15, 2011. The adoption of ASU 2011-04 is not expected to have a significant impact on the Company's consolidated financial position or results of operations.

In June 2011, the FASB issued ASU No. 2011-05, "Presentation of Comprehensive Income." ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders' equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company believes the adoption of ASU 2011-05 concerns presentation and disclosure only and will not have an impact on the Company*s consolidated financial position or results of operations.

In July 2011, the FASB issued ASU 2011-07, Health Care Entities (Topic 954), which requires healthcare organizations that perform services for patients for which the ultimate collection of all or a portion of the amounts billed or billable cannot be determined at the time services are rendered to present all bad debt expense associated with patient service revenue as an offset to the patient service revenue line item in the statement of operations. The ASU also requires qualitative disclosures about the Company*s policy for recognizing revenue and bad debt expense for patient service transactions and quantitative information about the effects of changes in the assessment of collectability of patient service revenue. This ASU 2011-07  is effective for fiscal years beginning after December 15, 2011, and will be adopted by the Company in the first quarter of 2012. Since the Company is not a health care entity, the standard does not have any impact on the Company*s consolidated financial position or results of operations.

On September 15, 2011 the FASB issued Accounting Standards Update (※ASU§) 2011-08, Testing Goodwill for Impairment (the revised standard). The revised standard is intended to reduce the cost and complexity of the annual goodwill impairment test by providing both public and nonpublic entities with the option of performing a ※qualitative§ assessment to determine if it is more-likely-than-not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards. The revised standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011, with early adoption permitted for certain companies. The Company has assessed the potential impact of the adoption of ASU 2011-08 on its consolidated results of operations and consolidated financial position and concluded that there is no impact.
 
 
- 40 -

 

BUSINESS

Our Business

Overview
 
The Registrant was incorporated under the laws of the State of Nevada on April 12, 2011.  Its principal offices are 7/F West Tower, Star International Mansion, No.6-20 Jinsui Rd.,Tianhe District, Guangzhou, Guangdong Province, PRC.   The Registrant, through its wholly owned subsidiaries Xingbang BVI and Xingbang HK, owns the WFOE, which controls Guangdong Xingbang, a variable interest entity, through a series of VIE contractual arrangements.  Guangdong Xingbang is the sole source of income and operations of the Registrant.  A summary of our business is described below.
 
General
 
Based in the city of Guangzhou, Guangdong Province, China, Guangdong Xingbang is a profitable and growing company principally engaged in the provision of e-commerce related services, marketing consultancy services to manufacturers, distributors and other businesses in the lighting, ceramics and other home furnishings industry in the PRC, as well as consulting services to local governments in the PRC.
 
We publish two weekly newspapers  targeted at the lighting and ceramics industry respectively, ※Guzhen Lighting Weekly§ and ※China Ceramics Weekly§.  ※Guzhen Lighting Weekly§ is a nationally distributed weekly newspaper targeted at the lighting sector of the home furnishing industry in China. It was first published in 2002.  ※China Ceramics Weekly§ is a nationally distributed weekly newspaper targeted at the ceramics sector of the home furnishing industry in China. It was first published in 2008.  Each of the two periodicals intends to provide comprehensive information with regard to products, new product trends, manufacturers, distributors, trade shows, forums, marketing opportunities and general news in the lighting and ceramics industry respectively.   The main subscribers of the two periodicals are manufacturers, distributors, and interior designers.  Each periodical also has an online version ( www.lightcity.cn and www.taocicity.com ) with similar content. To promote our ju51 Mall more effectively, we combined the two newspapers and distribute the integrated newspaper every two weeks on Fridays starting in September 20, 2011.
 
We also provide consulting services to businesses in the lighting and ceramics industries and local governments.  We assist businesses in developing sales and marketing strategies and advise them on branding, promotion and expansion of marketing channels.  We provide coverage of the business client and its products in our own periodical and website by providing in-depth analysis and review of the client*s products and services, its business image, as well as solicit broader public awareness of its brands.  We assist local governments to market and promote local businesses, create branding strategies, develop its industrial focus, design industrial strategies, and provide training to local officials to help local businesses.  Specifically among other things, we establish local business databases for our local government clients, cover the government*s local businesses and investment environment in our periodicals and website, arrange for potential investor and business partner tours in the city or town, coordinate special forums or trade fairs in the city or town and introduce high-profile business or economic people to meet with the city or town*s officials. 
 
We also provide e-commerce platform services to manufacturers, distributors and brick and mortar stores in the home furnishing industry starting beginning in August 2011. In the second half of 2010, we started to develop a business-to-business-to-consumer (※ B2B2C §) e-commerce platform as an extension of our ju51 Online Community. The ju51 Online Shopping Mall (※ ju51 Online Mall § or ※ ju51 Mall §) is designed to assist the home furnishing businesses that are our clients to expand their sales channels.  ※ju51§ sounds similar to the Chinese words of ※ju wu you,§ which means ※worry-free living§ in Mandarin. When fully constructed, the ju51 Online Mall is expected to have twelve marketplaces targeting twelve sectors in the home furnishing industry including light and lighting, ceramics, bath and toilet supplies, hardware, home textiles, closets, tiles and floor, doors and windows, furniture, home appliances, interior painting, and home d谷cor.  We generate revenue from commission payable by the manufacturers who operate the ※flagship stores§ on ju51 Mall, rent payable by the retailers who operate ※direct sales stores§ and service charges from distributors who operate as ※channel service providers§ on the ju51 Mall.  The services we provided via the ju51 Online Community at www.ju51.com , an information exchange forum we started in 2009, are continued at the ju51 Mall.
 
 
- 41 -

 

 
We generated revenue of $4.68 million and $5.22 million for our fiscal year 2009 and 2010, respectively, representing an increase of 11.54%.  We had two major revenue streams, advertising in our newspapers and consulting services. Our advertising revenue was $3.39 million and $3.47 million in 2009 and 2010, respectively, amounting to a growth of 2.36%. Our revenue from consulting services was $1.29 million and $1.76 million in 2009 and 2010, respectively, representing an increase of approximately 36.43%. Approximately  27.5% and 33.6% of our revenues in 2009 and 2010, respectively, were from consulting services.
 
Currently we have 153 full-time employees, including representatives located in 52 offices throughout China.

  Private Placement Transaction

Private Placement and Related Agreements

On October 20, 2011, we closed a financing transaction under which we sold an aggregate of 1,244,000  shares of common stock, to a total of 98 individual investors at RMB2.00 (approximately $0.31) per share, for total gross proceeds of RMB2,488,000 (approximately $385,640).  All of the investors are domiciled in and citizens of the People*s Republic of China.  The issuance of the shares was made in reliance on the exemption from registration provided by Regulation S of the Securities Act of 1933, as amended, as an offshore transaction involving non-U.S. persons.  
 
Overview of the Home Furnishing Industry in China
 
The People*s Republic of China is undergoing a drastic economic transformation.  According to the Chinese State Statistics Bureau, in China, the GDP per capital increased from RMB14, 185 ($1,734) in 2005 to RMB25, 575 ($3,745) per capita in 2009 with a compounded average growth rate (※CAGR§) of 21.2%.  Total national retail sales in China reached RMB15.46 trillion ($2.29 trillion) in 2010 compared to RMB6.72 trillion ($0.994 trillion) in 2005, representing a CAGR of 18.17%, according to the most recent figures available.  As comparison, US retail sales grew from$3.70 trillion in 2005 to 3.89 trillion in 2010, representing a CAGR of 1%.   In new research on Chinese consumers, management consulting firm McKinsey classifies two million households out of a population of 1.3 billion as ※wealthy,§ based on fairly modest annual earnings of more than $30,000.  An enormous middle class is rising, however, numbering some 70 million urban households, but these still earn $5,000 ($10,000) a year.
 
Due to average consumers* ever-increasing interest in building a comfortable and aesthetically appealing home, the home furnishing industry in China has been flourishing in recent years. According to information collated by the Academy of South China Modern Market Economics, a market data compilation and research institute in China, the total annual sales volume in the home furnishing industry in China reached $288 billion in 2008, $322 billion in 2009 and $418 billion in 2010, representing a CAGR of 20.47%.The number of businesses in the home furnishing and building materials industry has also steadily increased. According to the Academy of South China Modern Market Economics, the number of home furnishing product manufacturers increased from 41,140 in 2008, and 49,076 in 2009 to 56,380 in 2010, and the number of distributors and retailers increased from 779,289 in 2008, to 861,388 in 2009 and to 973,244 in 2010.
 
 
- 42 -

 
 
Home Furnishing E-Commerce Drivers
 
We believe that microeconomic, demographic and related factors in China will be favorable to continued growth of our media and consulting business and our expansion into e-commerce.
 
 Growing prosperity of the Chinese general population.   The increased spending power of China*s general population continues to be reflected in the increased consumption of home furnishing products and services.  We see a general trend of increasing demand for a comfortable and appealing home environment.
 
 Dramatic increase of internet users. China has surpassed the U.S. as the country with the largest number of internet users. The volume of e-commerce in the home furnishing industry increased from RMB10.2 billion ($1.5 billion) in 2008 to RMB17.7 billion ($2.6 billion) in 2009 and RMB 22.8 billion ($3.4 billion) representing a CAGR of 50.04% in 2010 according to the Academy of South China Modern Market Economics. According to data compiled by the Academy of South China Modern Market Economics, 88% of mid-size to small businesses in the home furnishing industry in China have internet connection, 38% of them have tried to set up online stores or stand-alone e-commerce websites, and 61.56% of the manufacturers tried online sales.
 
  Relatively less competition.   Our potential competitors include other B2C e-commerce companies, brick and mortar retailers and distributors and well established portals and internet search engines that are involved in e-commerce, either directly or in collaboration with other retailers. However, there are few having the same B2B2C business model as our intended business model where manufacturers, distributors and consumers will benefit from the ju51 platform.
 
Growth Strategy
 
Our key strategic initiatives include the following:
 
 
We are undergoing a significant shift of our business model from being a print media based advertising operator and consulting services provider to a multi-service provider that provides e-commerce and advertising and consulting services. We aim to build the ju51 online mall to be an e-commerce platform with significant revenue contribution to our whole business.  We will continue providing print media based advertising and consulting services and the new e-commerce business is expected to promote our advertising and consulting services.
 
 
Strengthen our leading position in print media in the lighting and ceramics sectors;
 
 
Further expanding our print media distributing network, by engaging our channel service providers to be our newspaper distributors;
 
 
Phase in other home furnishing sectors including bath and toilet supplies, hardware, home textiles, closets, tiles and floor, doors and windows, furniture, home appliances, interior painting, and home d谷cor by having dedicated newspaper and dedicated market places in our ju51 Online Mall. In addition, we plan to develop distinct newspapers for each of these sectors, as well as, have a distinct ※market place§ or ※channel§ for each sector in the home furnishing industry in the ju51 Mall.
 
 
Capitalize on our credibility in the home furnishing industry established through our past years of operations.  We are the main initiator and sponsor of a home furnishing trade association named ※Alliance of Manufactures and Dealers in the Home Furnishing Industry§, a self-regulatory private organization with a goal to promote fair and honest dealing in the home furnishing industry.   We intend to develop more clients through the association.
 
 
 
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Competitive Advantages
 
We believe there are several key factors that will continue to differentiate us from our competitors in terms of advertising and consulting services offerings targeting the home furnishing industry:

 
In-depth knowledge of the home furnishing industry and extensive database of the  market players in the industry;
 
 
Profound advertising and marketing experience and capability in the home furnishing industry;
 
 
Good relationship with manufacturers, distributors and retailers in the home furnishing industry;
 
 
52 representative offices across China collecting first-hand industry information and rendering up-to-date advertising services to clients; and
 
 
Our ※soft advertisement§ products such as special coverage of a business or interview with the founder of a business.
 
Going forward, we anticipate the following factors will make us a strong competitor in the home furnishing e-commerce sector:
 
 
In-depth knowledge of the home furnishing industry;
 
 
Strong capability to group the most reputable manufacturers and brands in a single online platform, namely our ju51 online mall;
 
 
Efficient consumer protection system;
 
 
Association with our channel service providers; and
 
 
Low-operating costs and lower product price compared to other similar e-commerce websites selling home furnishing products.
 
 
Products and Services
 
Advertisements in ※Guzhen Lighting Weekly§ Newspaper and its online version www.lightcity.cn
 
※Guzhen Lighting Weekly§ is a nationally distributed free weekly newspaper targeted at the light and lighting sector of the home furnishing industry in China.  ※Guzhen§ means ※ancient town§ and it is the name of a town in Guangdong Province.  
 
Since its inception in 2002, ※Guzhen Lighting Weekly§ newspaper and its online version www.lightcity.cn (launched in 2003), have been publishing diversified light and lighting products information, new product trends, introduction of manufacturers, distributors, wholesalers and retailers, and supply and demand needs of these businesses, as well as, trade shows, forums, marketing opportunities and general news in the lighting industry.  Both the print and online versions are licensed to disseminate advertisements.  The main subscribers of the newspaper are the manufacturers, distributors, spare parts manufacturers, interior designers and other businesses in the light and lighting sector.  Currently, the weekly circulation reaches approximately 270,000 including about 150,000 visitors to www.lightcity.cn .  It is regarded by distributors and contractors as an important reference guide for their purchase and ordering decisions.
 
 
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※Guzhen Lighting Weekly§   is published as a weekly issue as a supplement to ※Shopping Guide§, a nationally circulated newspaper under the national Standard Serial Number of CN11-0291. Under relevant PRC news and media regulations, we are unable to obtain our own Standard Serial Number. Therefore, ever since the inception of our newspapers, we obtained authorization with the Shopping Guide Press (※ Shopping Guide §), the operator of ※Shopping Guide§ whereby our newspapers are published as special supplements to the Shopping Guide. The authorization was given to us orally before March 2008.  In March 2008, we entered into an Exclusive Advertising Agency Agreement with Shopping Guide where we obtained a five-year advertising agency right from Shopping Guide for the Guzhen Lighting Weekly from March 2008 to March 2013. In connection with such agreement, Shopping Guide gave us authorization to use the Standard Serial Number during the same term as the Exclusive Advertising Agency Agreement.

※Guzhen Lighting Weekly§   is distributed every Friday, for free, via the Chinese postal office and our own distribution channels in China. Revenue and its online version from the newspaper come from the advertisements located therein.

Advertisements in ※China Ceramics Weekly§ Newspaper and its online version at www.taocicity.com
 
※China Ceramics Weekly§ is a nationally distributed free weekly newspaper targeted at the residential ceramic sector of the home furnishing industry in China.  Since its inception in 2008, ※Guzhen Lighting Weekly§ newspaper and its online version at www.taocicity.com , launched the same year, have been covering ceramic manufacturers and distributors, designated ceramic marketplaces, ceramic products and general news in the ceramics industry.  Both the print and online versions are licensed to disseminate advertisements.  The main subscribers of the newspaper are the manufacturers, distributors, spare parts manufacturers, interior designers and other businesses in the ceramics sector.  It is also circulated, for free, in the hotels and public areas of a number of ceramics towns in China such as Shiwan of Foshan, Zibo of Shandong Province and Jingdezhen in Jiangxi Province.   The online version offers additional convenience to the visitors and functional interactive features. Currently, its weekly circulation is approximately 290,000, including 150,000 visitors to www.taocicity.com . It is regarded by the distributors and contractors as an important reference guide for their purchase and ordering.
 
※China Ceramics Weekly§   is also published as a special supplement to ※Shopping Guide§ under the same national Standard Serial Number of CN11-0291 pursuant to oral and later written authorization granted by Shopping Guide. The authorization was given to us orally before March 2008.  In March 2008, we entered into an Exclusive Advertising Agency Agreement with Shopping Guide where we obtained a five-year advertising agency right from Shopping Guide for the China Ceramics Weekly from March 2008 to March 2013. In connection with such agreement, Shopping Guide gave us authorization to use the Standard Serial Number during the same term as the Exclusive Advertising Agency Agreement for the China Ceramics Weekly.

※China Ceramics Weekly§   is distributed every Wednesday, for free, via Chinese post-office and our own distribution channels in China. Revenue and its online version from the newspaper come from the advertisements located therein.

To promote our ju51 Mall more effectively, we combined ※Guzhen Lighting Weekly§ and China Ceramics Weekly§  together under a common cover named "ju51 Business Intelligence" and distribute the integrated newspapers every two weeks on Fridays starting September 20, 2011.

Consulting Services
 
We also provide consulting services to business in the lighting and ceramics industries and local governments.
 
We assist businesses in developing their sales and marketing strategy and advise them on branding promotion and expansion of sales channels. We provide coverage of the business client and its products in our own newspaper and our websites by providing in-depth analysis and reviews of the client*s products and services and its business image, as well as solicit broader public awareness of its brands.  We do not receive fees for including this coverage on our websites. We also occasionally introduce strategic investors or acquisition targets to our business clients. We normally enter into service agreements with these business clients on our standard form. The periods of services vary depending on each client*s need and generally range from 8 months to 14 months. We charge client service fees ranging from RMB 300,000 (approximately USD $44,000) to RMB 500,000 (approximately USD $73,000) for each agreement. The client pays the full service fee upon execution of the agreement. So far, we have provided such consulting services to approximately 100 business clients.

 
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We also assist local governments, most of which are fourth tier towns or cities, to market and promote local businesses in the home furnishing or other industries, help local businesses with branding, develop its industrial focus, design industrial strategies, and provide training to local officials to help local businesses and regulate business behaviors.  Specifically, we establish local business databases for local government clients, cover the government*s local businesses and investment environment in our print and online media, arrange for potential investor and business partner tours in the town or city and coordinate special forums or trade fairs in the city or town.  We enter into annual cooperation agreements with these governments on our standard form contract. The government pays consulting fees ranging from RMB 2,000,000 (approximately USD $294,000) to RMB 3,000,000 (approximately USD $440,000) per year.  The local government clients pay the full amount upon execution of the agreement.  So far, we have provided consulting services to 8 local government clients, including Guzhen in Guangdong province, Ziyang in Sichuan province and Yunxiao in Fujian province.
 
We also offer ※Home Furnishing Yellow Page§ to businesses in the industry.  The Yellow Page was compiled and published by us.  We have a strategic research center that collects and compiles market and business data in the lighting, ceramics and other home furnishing sectors. The research center frequently cooperates with government and other institutions such as the State Council Development Research Center, the Southern Modern Market Economic Institute, and the Guangdong Science and Technology Information Center to jointly collect and develop market data in the home furnishing industry.

 e-Commerce related services through  ju51 Online Mall
 
We provide e-commerce platform services to manufacturers, distributors and brick and mortar stores in the home furnishing industry through the ju51 Mall, which was launched in August 2011, and superseded the operation of the previous ju51 Online Community.  The ju51 Mall is designed to assist the home furnishings businesses that are our clients to expand their sales channels. When fully constructed, the ju51 Mall is expected to have twelve marketplaces targeting twelve sectors in the home furnishing industry including light and lighting, ceramics, bath and toilet supplies, hardware, home textiles, closets, tiles and floor, doors and windows, furniture, home appliances, interior painting, and home d谷cor. As of November 11, 2011, 75 manufacturers in the light and lighting sector and 16 province-level distributors, covering 28 of 31 provinces in China, or so called ※channel service providers§, have signed agreements joining the ju51 Online Mall and 1,015 brick-and-mortar retailers have applied to open direct sale stores on the ju51 Mall. 
 
After launching in August, 2011, we found the prices listed by direct sale stores were not competitive, so we decided to adopt an updated business model for the ju51 Mall starting October 10, 2011. Under the new model, the manufacturers open flagship stores in the online mall where they showcase and sell their products, list prices for products and process orders placed online by consumers.  We will also have direct sale stores on our ju51Mall, where only brick-and-mortar retailers can open direct sale stores. A direct sale store will not sell products featured in our flagship stores, but instead act as shopping guide and provide product support and services. When a consumer places order online directly with flagship stores, the direct sale store located closest to the consumer will receive the order simultaneously and provide product support and services, such as returns, exchanges, refunds and installation. By doing so, direct sale stores can earn commission at a percentage of the retail price. The reason for having such direct sales stores as shopping guides is to address the Chinese consumers* concern about return or exchange of products ordered online. The channel service providers will deliver products from manufacturers to direct sale stores. Although rare, they may also deliver products directly to consumers, if it is more cost-efficient.    Customers may avoid paying the shipping fees by picking up the product at a local brick-and-mortar store.  Such business model is designed to make sure consumers will receive quality products and services and have a good shopping experience at the ju51 Mall.
 
We expect to generate revenue from the commission paid by the manufacturers for their flagship stores, the rent paid by retailers for their direct stores, and service charges paid by channel service providers.   We will also generate advertising revenue from the ju51 Mall.  The manufacturers will pay commission to us based on a percentage of retail sales generated by the flagship store.   The direct sale stores pay rent during the term of their on-line ※leases§.  We gave a two-month grace period to the retailers, who will not need to pay rent until January 1, 2012.  The distributors will pay variable service charges depending on the total population in their particular geographic area. We expect the current business model will keep retail prices at the ju51 Mall at a competitive level compared with our competitors and facilitate the growth of the ju51 Mall.
 
 
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Publishing and Printing
 
We have an arrangement with the Shopping Guide, whereby we publish our two newspapers under the national Standard Serial Number of CN11 0291. We currently have a five-year advertisement agency agreement with Shopping Guide to be the exclusive agent to handle all advertisements in our two newspapers.
 
We outsource the production of our newspapers to independent third party printers. Currently, we have printing agreements with Zhujiang Evening News Printing House and Beijing Zhuowen Printing Technology Co. Ltd.
 
IT Support
 
We have an in-house information technology research, development and operation center to support our web portals. We currently have 18 employees as technology support staff including system designers, webpage designers and IT engineers working on the construction of the ju51 Online Mall. We intend to increase our investment in our web design and e-commerce construction capability to support the launch of the ju51 Online Mall. We also plan to double the number of IT staff at launch of the ju51 Online Mall.

We have access to reliable and secure network infrastructure which provides sufficient support to our operations. Our web portals are connected to the Internet by reputable Internet connection operators such as China United Network Communication Group Company Limited (or China Unicom) and China Telecom Corporation (or China Telecom). Our 37 servers are located at four places, namely 21Vianet Asia Pacific Computer House, ChinaNetCenter Jiaochang Xi Computer House, ChinaNetCenter Sun City Computer House and our headquarters. These telecommunication operators provide us with support services twenty-four hours per day, seven days per week. They also provide connectivity for our servers through multiple high-speed connections.
 
Research and Development
 
Our own IT department has developed certain software and applications and obtained 14 computer software copyright registrations with the Chinese Copyright Bureau since 2008. Our IT staff, with the possible collaboration of outside IT consultant, will continue to design and develop applications geared toward e-commerce and peripheral products.

Operations
 
Edit and Publishing Process of our Newspapers
 
We have dedicated and separate editorial departments for each of the two newspapers and their online versions.  We generate most of the content internally, although sometimes we also pay royalties to publish content authored by third parties. The below chart explains how the contents are compiled, edited and published.
 
 
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Printing and Circulation Process of our Newspapers
 
We outsource the printing of the two newspapers to independent printers.  Currently, the newspapers are distributed via Chinese Postal Office and our own distribution network located in 52 cities across China. Since September 2011, the two magazines "Gruhzen Lighting Weekly" and "China Ceramic" are combined together under the common cover name of "ju51 Business Intelligence" and shipped via railway and trucks on each Saturday. The chart below sets out how our newspapers are packaged, shipped and distributed.
 
 
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Operation of Ju51 Mall (e-Commerce)

Under the current model of the ju51 Mall, product manufacturers open flagship stores in the online mall where they showcase their products, list prices for products and process orders placed online by consumers.  Brick-and-mortar retailers open direct sale stores on the ju51 mall to act as shopping guide and provide product support and services, including returns, exchanges, refunds and installation. When a consumer places an order online directly with flagship stores, the direct sale store located closest to the consumer will receive the order simultaneously and provide product support and services, such as returns, exchanges, refunds and installation. The channel service providers will deliver products from manufacturers to direct sale stores or directly to consumers, whichever is more cost-efficient.    The chart below sets out how a consumer order is processed on the ju51 Mall.




 
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Sales and Marketing
 
Development of General Advertiser Clients
 
We solicit general commercial advertisements for our newspapers and their online versions.  We also provide advertisement design services to our clients.
 
We have developed certain processes for the development and servicing of these general advertiser clients as below:
 

 
Development of Case Advertiser Clients
 
In addition to soliciting general commercial advertisements for our prints and online newspapers, we also design customized advertisements to selected business clients, or ※case advertiser clients§.  These advertisements are presented in many forms, such as exclusive interviews with the founder of a business, in-depth reporting of a businesses* growth and dedicated coverage of a particular product.
 
We have developed certain processes for the development and servicing of these case advertiser clients as below:
 
 
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Competition
 
There are several newspapers that provide similar coverage about the light and lighting industry and ceramic sectors in China. According to the data compiled by China Ranking, an institute which ranks Chinese businesses in various industries, ※Guzhen Lighting Weekly§ has the largest advertising revenue, the largest circulation and most online visitors among the five comparable print newspapers targeted at the light and lighting industry, including ※China Lighting§, ※Lighting Weekly§, ※World Lighting Times§, and ※China Lighting Industry Weekly§. According to the data compiled by China Ranking, ※China Ceramics Weekly§ has the largest advertising revenue, the largest circulation and most online visitors among the five comparable print newspapers targeted at the ceramic industry, including ※Ceramic City News§, ※Ceramic Information Weekly§, ※China Building Material Weekly§ and ※Ceramic News§. We believe our newspapers have the following competitive advantages:

 
Attractive content.  Our newspapers and website content are well-researched products and thus we believe more readable and more informative than those of our competitors.
 
Wide distribution and data collection network. We have 52 representative offices throughout China which are capable of distribution of newspapers as well as engaging discussion with the local home furnishing businesses and collecting market data;

 
Unique advertising model. We have developed a full series of value-added advertising and consulting services available to client which we believe delivers better marketing impact than regular commercial advertisements;
 
Our standardized work flow and stringent quality control.  We have developed a standardized process for editing, publication and distribution of the newspapers and development and servicing of clients.  We also have management supervise the quality of the content on the newspaper and websites and the quality of the advertisements and marketing advice we offered to clients; and
  
 
Quality and impartial content. We strive to have an impartial and fair opinion toward the business and believe we have earned credibility over the years for doing so. We believe this makes our media more attractive and a better platform for our advertising clients.
 
 
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We will face intense competition for our B2B2C business when the ju51 Mall is launched (expected to be in August 2011).  We believe our ju51 Mall will have the following competitive advantages:
 
 
Good relationship with brand manufacturers who will set up flagship stores in the ju51 Mall to showcase their products;

 
Quality products for sale in the ju51 Mall as a result of our strict evaluation of manufacturers seeking to open flagship stores;

 
Reliable delivery and installation services provided by channel service providers;

 
Reliable after-sale services, as only brick and mortar retailers are allowed to open direct sale stores in the ju51 Mall; and

 
Consumer confidence due to our consumer protection fund dedicated to compensate consumers in case of dissatisfaction with products and services purchased from the ju51 Mall.
 
Intellectual Property
 
We have registered three trademarks in seven classes with the China Trademark Office with a valid term effective through 2019 or 2020, including the symbolic variation of the Chinese character ※Xing§, Chinese character of ※Light City§ and www.lightcity.cn , and Chinese character of ※ Ju Wu You§ and www.ju51.com , We have obtained software copyright registration with China the Copyright Bureau for 14 software and applications we developed with a term effective through 2008 or 2009. We also have registered 7 domain names with the China Domain Name Administrative Center, which are renewable annually upon payment of certain fees.
 
Government Regulation
 
General
 
The media and advertising industry in China is governed by the State Council, which is the highest authority in the executive branch of China*s central government, and several ministries and agencies under its authority, including the State Administration for Industry and Commerce (※SAIC§), the State Administration of Radio, Film and Television (※SARFTA§), the General Administration of Press and Publication, the Ministry of Culture and the State Council News Office.
 
Regulations Regarding Foreign Investment in the Chinese Media and Value Added Telecommunication Sector
 
On July 6, 2005, the Chinese government promulgated Certain Opinions on the Introduction of Foreign Investment in Cultural Fields , which provide an overall framework with respect to foreign investments in Chinese media and other cultural sectors. This document specifies the areas in which foreign investments are permitted or prohibited in accordance with China*s commitments regarding its entry into the World Trade Organization, or WTO. Under the document, foreign investment in the media sector is permitted in the areas of printing of packaging and decorating materials, redistributing books, newspapers, periodicals, producing of recordable disks, duplication of read only disks, and engaging in works of art and the construction and operation of performance sites, cinema, event brokerage agencies and movie technology. In addition, because the current PRC regulations only permit operation of media companies by state-owned enterprises or very few selected privately-owned businesses, we are unable to obtain our own Standard Serial Number. Ever since the inception of our newspapers, we have been distributing our newspapers as supplements to the ※Shopping Guide§ pursuant to authorization given by Shopping Guide.
 
Our online shopping mall and websites may be regarded as value added telecommunications services under relevant PRC laws. Foreign direct investment in telecommunications companies in China is regulated by the Regulations for the Administration of Foreign-Invested Telecommunications Enterprises (or the FITE Regulations ), which were issued by the PRC State Council on December 11, 2001 and amended on September 10, 2008. The FITE Regulations stipulate that telecommunications enterprises in the PRC with foreign investors (or FITEs), must be established as Sino-foreign equity joint ventures. Under the FITE Regulations and in accordance with WTO-related agreements, the foreign party to a FITE engaging in value-added telecommunications services may hold up to 50% of the equity of the FITE, with no geographic restrictions on its operations. The PRC government has not made any further commitment to liberalize its regulation of FITEs.
 
 
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Our management believes, subject to the uncertainties and risks disclosed elsewhere in this registration statement under the heading ※Risk Factors§, the ownership structure of our WFOE in PRC operating and VIE comply with all existing laws, rules and regulations of the PRC and each of such companies has the full legal right, power and authority, and has been duly approved, to carry on and engage in the business described in its business license. We have not obtained any legal opinion from, or otherwise been advised by, any PRC legal counsel with respect to our VIE arrangements.
 
Censorship of Advertising Content by the Chinese Government
 
The advertising industry in China is governed by the Advertising Law which came into effect in February 1995. In addition, principal regulations governing advertising services in China include: (1) the Advertising Administrative Regulations, effective December 1987; and (2) the Implementing Rules for the Advertising Administrative Regulations, effective January 2005. Chinese advertising laws and regulations set forth certain content requirements for advertisements in China, which include prohibitions on, among other things, misleading content, superlative wording, socially destabilizing content, or content involving obscenities, the supernatural, violence, discrimination or infringement of the public interest. There are specific restrictions and requirements regarding advertisements that relate to matters such as patented products or processes, pharmaceuticals, medical instruments, agrochemicals, veterinary pharmaceuticals, foodstuff, alcohol, cosmetics and others. In addition, all advertisements relating to pharmaceuticals, medical instruments, agrochemicals and veterinary pharmaceuticals advertised through radio, film, television, newspaper, periodical and other forms of media, together with any other advertisements which are subject to censorship by administrative authorities according to relevant laws and administrative regulations, must be submitted to the relevant administrative authorities for content approval prior to dissemination.
 
Advertisers, advertising operators and advertising distributors are required by Chinese advertising laws and regulations to ensure that the content of the advertisements they prepare or distribute are true and in full compliance with applicable laws. In providing advertising services, advertising operators and advertising distributors must review the prescribed supporting documents in connection with any advertisements and verify that the content of such advertisements comply with applicable Chinese laws and regulations. In addition, prior to distributing advertisements for certain commodities that are subject to government censorship and approval, advertising distributors are required to ensure that governmental review has been performed and approval obtained. Violation of these regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the relevant administrative authorities may order violators to cease their advertising business operations. Furthermore, advertisers, advertising operators or advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties in the course of their advertising business. At the present time, we are not subject to any of the penalties mentioned above.
 
Properties
 
Our corporate offices are located at 7/F West Tower, Star International Mansion, No.6-20 Jinsui Rd.,Tianhe District, Guangzhou, Guangdong Province, PRC.   Under the current PRC laws, land is owned by the state, and parcels of land in rural areas which is known as collective land is owned by the rural collective economic organization. ※Land use rights§ are granted to an individual or entity after payment of a land use right fee is made to the applicable state or rural collective economic organization. Land use rights allow the holder of the right to use the land for a specified long-term period.  Our Chairman and Chief Executive Officer, Mr. Xiaohong Yao and his wife, Ms. Dongmei Zhong, jointly own the land use right of unit 703 and 705, which constitute about two thirds of our total office area.   We entered into a two-year lease agreement with Mr. Yao and Ms. Zhong, whereby we are obligated to pay monthly rent of approximately RMB 81,781.7 (approximately $12,467).  We believe the rent is reasonable and in accordance with the market price. We lease the remaining one third of our corporate office, Unit 702, from an independent third party whereby we pay monthly rent of RMB 39,330 (approximately $5,810).  The lease term was from March 1, 2010 to February 28, 2011.  We no longer lease such space.
 
 
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Employees
 
All of our 153 employees are located in China.  There are no collective bargaining contracts covering any of our employees. We believe our relationship with our employees is satisfactory.
 
We are required to contribute a portion of our employees* total salaries to the Chinese government*s social insurance funds, including medical insurance, unemployment insurance and job injury insurance, and a housing assistance fund, in accordance with relevant regulations. We contributed approximately $81,698, $111,230 and $54,665 for the years ended December 31, 2010, 2009 and 2008, respectively. We expect the amount of contribution to the government*s social insurance funds to increase in the future as we expand our workforce and operations.

MANAGEMENT

The following table sets forth the name, age, and position of our sole officer and director after the Closing Date.  Executive officers are elected annually by our Board of Directors.  Each executive officer holds his office until he resigns, is removed by the Board, or his successor is elected and qualified. Directors are elected annually by our stockholders at the annual meeting.  Each director holds his office until his successor is elected and qualified or his earlier resignation or removal.
   
Name
Age
Position
Xiaohong Yao
45
Chairman of the Board of Directors, President, Chief Executive Officer
Haigang Song
45
Director, Interim Chief Financial Officer, Treasurer and Secretary
Xiaole Zhan
29
Director, Marketing Manager
Joseph Levinson (1) (2)
35
Director (Chairman of the Audit Committee)
Gangxian Su (1) (2) (3)
46
Director (Chairman of the Compensation Committee)
Xingzheng Tan (2) (3)
56
Director (Chairman of the Nominating and Corporate Governance Committee)
Fei Wu (1) (3)
46
Director
 
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Nominating and Corporate Governance Committee
 
Xiaohong Yao .  Mr. Yao has been our Chairman of the Board of Directors, President and Chief Executive Officer since our inception. Mr. Yao is the founder of Guangdong Xingbang and has been the Chief Executive Officer and President of Guangdong Xingbang since its inception in 2002.  Mr. Yao has been engaged in the media industry for 24 years, and is proficient in digital media management and market operations. Mr. Yao is currently the executive president of the School of Modern Industry, Guangzhou University, the president of the Academy of South China Modern Market Economics, the standing director of the China General Chamber of Commerce, the vice-chairman of the China Foundation of Consumer Protection and the vice-chairman of the Guangdong SME Financial & Listing Promotion Association. Mr. Yao is also Commissioner in the China Planning Assessment Activity and the National After-Sale Assessment Activity, the National Retailer and Supplier Fair Transaction Assessment Activity, which are affiliated with the China General Chamber of Commerce.  Mr. Yao graduated from Sun Yat-sen University with an MBA degree. Mr. Yao*s extensive experience in the advertising and consulting industry, his acute vision and outstanding leadership capability, as well as his commitment to the Company make him well-qualified in the Board*s opinion to serve as our Chairman of the Board.
 
 
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Haigang Song. Mr. Song has been the director and interim Chief Financial Officer since our inception.  He joined Guangdong Xingbang as a deputy finance controller in July 2006. From February 2005 to June 2006, Mr. Song worked in Guangdong Apples Industrial Co., Ltd as financial manager. Mr. Song graduated from Jiangxi University of Finance & Economics. Mr. Song is a Certified Senior Business Trainer in China. Mr. Song has approximately twenty years of experiences in accounting and financial management. We believe his long-term relationship with Guangdong Xingbang and insight into our business qualifies him as one of our directors.
 
Xiaole Zhan . Mr. Zhan has been our director and Marketing Manager since our inception. Mr. Zhan joined Guangdong Xingbang in June 2002 and has since been appointed as editor in chief of the Newspaper Management Center and executive manager of the Project Client Department. Mr. Zhan obtained his bachelor degree from Hunan University of Technology in 2002, majoring in advertising communication. Mr. Zhan is a Certified Senior Business Planner in China. Mr. Zhan has accumulated substantial institutional knowledge of our business and operations. Mr. Zhan*s in-depth knowledge and extensive experience in the media industry and home-furnishing industry make him well positioned for his role as one of our directors.
 
Joseph Levinson. Mr. Levinson was appointed as an independent director and Chairman of our Audit Committee in June 2011. Mr. Levinson speaks, reads and writes Chinese fluently and has vast experience working with Chinese companies. Mr. Levinson has been a director for China Growth Corp, a water purification system manufacturer, from March 2011 to present and a director for China AgriCorp, Inc., a soybean producer in China, from April 2011 to present.  Mr. Levinson was a director for Energroup Holdings Corp., a pork producer, from April 2010 to January 2011, a director for China 3C Group, an electronics company in China, from May 2007 to January 2009 and a director for Sino Clean Energy, Inc., a clean coal manufacturer, from April 2011 to May 2011.  Mr. Levinson was previously a Manager in the banking practice of the New York office of Deloitte and Touche and was involved in numerous transactions involving complex financial structures. Mr. Levinson also previously worked at KPMG in New York and Hong Kong. In the 1990s, Mr. Levinson served as an executive of Hong Kong Stock Exchange-listed China Strategic Holdings, where his major responsibilities included its subsidiary, China Tire, one of the first Mainland Chinese companies to list on the NYSE. He is also the editor of ※Wall Street Guanxi: How Chinese Companies Can Maximize Their Value in the U.S. Capital Markets§, a trade paperback published in Chinese by Beijing University Press in 2007.  Mr. Levinson graduated summa cum laude from the University at Buffalo in 1994 with a double major in accounting and finance.  Mr. Levinson*s track record as a U.S. Certified Public Accountant for more than 15 years, and his long experience in China were factors viewed favorably by the Board in selecting Mr. Levinson for a directorship and Chairman of our Audit Committee.  Specifically, Mr. Levinson*s experience as a manager at the ※Big 4§ firms of Deloitte and Touche, his work as a U.S. Certified Public Accountant, and his academic achievements were factors in leading to this recommendation. Mr. Levinson is fluent in Mandarin and will be an asset in communicating with management and providing clarity on financial issues.
   
Gangxian Su. Mr. Su was appointed as an independent director and Chairman of our Compensation Committee in June 2011. Mr. Su, as its founder, has been the president of StanChina, which principal business includes communication of international culture, research on media and public policy, art communication activity and training, since 1999. Mr. Su was engaged in media research at the Chinese Academy of Social Sciences during which Mr. Su was in charge of the task group for the Olympics bidding campaign and promotion and was one of initiators for the slogan ※New Beijing, New Olympic Sports§. Mr. Su graduated from Communication University of China with a master*s degree. Mr. Su brings a wealth of knowledge to our Board of Directors and has proven to possess keen insight into our business.
 
Xingzheng Tan. Mr. Tan was appointed as an independent director and Chairman of our Nominating and Corporate Governance Committee in June 2011. Mr. Tan currently serves as vice-chairman of the China Foundation of Consumer Protection, a member of China National Wholesale & Retail Market Standardization Committee, the standing vice director of the China General Chamber of Commerce and the executive vice general-secretary of the China General Painting & Calligraphy Institute. Mr. Tan was the founder and has been board chairman of Wuzhou Creative Marketing Planning Co., Ltd, a marketing consulting company, since 1994. Since 1989, Mr. Tan has been engaged in marketing planning for national exhibitions and business events for more than150 clients including well-known Chinese businesses and organizations. Mr. Tan was elected one of the ※China Top Ten Planners§ in June 2000 and one of the ※China Top Ten Planning People§ in June 2002. Mr. Tan graduated from The Open University of China with an associate college degree. We believe Mr. Tan*s life-long background in management education, as well as his business aptitude and strong analytical skills, qualify him for his position as one of our directors.
 
 
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Fei Wu . Mr. Wu was appointed as an independent director in June 2011. From May 2010 until present, Mr. Wu has been senior researcher in Brand Culture Research Development Centre affiliated with the China Culture Administration Society and Chairman of Travel Integration World Group Limited. From July 2005 to May 2010, Mr. Wu was an executive editor in chief at Global Travel, a newspaper in the travel industry. Mr. Wu graduated from Fudan University with a bachelor degree. Mr. Wu is a senior consultant of Greater China Region in World Carnival. Mr. Wu has more than 17 years of experience in the media industry. Mr. Wu*s in-depth knowledge and years of experience in the operation and management of media companies make him an invaluable asset to our board and our business.
 
Family relationship
 
There are no family relationships, or other arrangements or understandings between or among any of the directors, executive officers or other person pursuant to which such person was selected to serve as a director or officer.
 
  Involvement in Certain Legal Proceedings
 
No director, person nominated to become a director, executive officer, promoter or control person of the Company has, during the last ten years: (i) been convicted in or is currently subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to any Federal or state securities or banking or commodities laws including, without limitation, in any way limiting involvement in any business activity, or finding any violation with respect to such law; (iii) has any bankruptcy petition been filed by or against the business of which such person was an executive officer or a general partner, whether at the time of the bankruptcy or for the two years prior thereto; (iv) been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:  (a) Any Federal or State securities or commodities law or regulation; or (b) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (c) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; nor (v) been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. (covering stock, commodities or derivatives exchanges, or other SROs).
 
Board Committees
 
On June 15, 2011, the Board created the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee and has adopted charters for these committees. The Board has determined that in its judgment, Mr. Joseph Levinson, Mr. Gangxian Su, Mr. Xingzheng Tan and Mr. Fei Wu are independent directors within the meaning of the NASDAQ Listing Rules and the NYSE Amex Company Guide.
 
 
- 56 -

 
 
Audit Committee
 
The Board of Directors adopted and approved a charter for the Audit Committee on June 15, 2011. Currently, three directors comprise the Audit Committee: Mr. Levinson, Mr. Su and Mr. Wu. Mr. Levinson serves as the chairman of the Audit Committee. The members of the Audit Committee are currently ※independent directors§ as that term is defined in NASDAQ Listing Rules and NYSE Amex Company Guide. Mr. Levinson qualifies as an ※audit committee financial expert§ as that term is defined in applicable regulations of the SEC. Our Audit Committee is responsible for recommending our independent auditors and overseeing our audit activities and certain financial matters to protect against improper and unsound practices and to furnish adequate protection to all assets and records. Our Audit Committee pre-approves all audit and non-audit services provided by our independent auditors. These services may include audit services, audit-related services, tax services and other services.
 
Compensation Committee
 
The Compensation Committee currently consists of Mr. Levinson, Mr. Su and Mr. Tan. Mr. Su serves as chairman of the Compensation Committee. All of the members of the Compensation Committee are currently ※independent directors§ as that term is defined in NASDAQ Listing Rules and NYSE Amex Company Guide. The Compensation Committee is responsible for overseeing and, and as appropriate, making recommendations to the Board regarding the annual salaries and other compensation of our executive officers and directors, and providing assistance and recommendations with respect to the compensation policies and practices of the Company.
 
Nominating and Corporate Governance Committee
 
The Nominating and Corporate Governance Committee currently consists of Mr. Su, Mr. Tan and Mr. Wu. Mr. Tan serves as the chairman of the committee. All members of the Nominating and Corporate Governance Committee are currently ※independent directors§ as that term is defined in NASDAQ Listing Rules and NYSE Amex Company Guide. The Nominating and Corporate Governance Committee will assist the Board in: (i) identifying, screening and recommending qualified candidates to serve as directors of the Company and (ii) maintaining oversight of the Board*s and the Company*s governance functions and effectiveness.

 
EXECUTIVE COMPENSATION

Executive Compensation Summary
 
The following table sets forth all cash compensation paid by us for the years ended 2010 and 2009.  The table below sets forth the positions and compensations for the two most highly compensated officers and directors.  All the officers were paid in Renminbi and the amounts reported in this table have been converted from Renminbi to U.S. dollars based on an average exchange rate of RMB 6.7696  to $1.00, in 2010 and RMB 6.8310 to $1.00 in 2009.
 
SUMMARY COMPENSATION TABLE
 
Nameand Principal
Position
 
Fiscal Year
   
Salary
($)
   
Bonus
($)
   
Stock
Awards
($)
   
Option
Awards
($)
   
Non-Equity
Incentive Plan
Compensation
($)
   
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
   
All Other
Compens-ation
($)
   
Total
($)
 
Xiaohong Yao
Chairman, President
    2009 (1)   $ 36,539         ---       ---       ---       ---       ---       ---     $ 36,539  
and CEO     2010 (2)   $ 36,870       ---                                             $ $36,870  
                                                                         
Haigang Song
    2009 (1)   $ 15,810       ---       ---       ---       ---       ---       ---     $ 15,810  
Interim CFO
    2010  (2)   $ 15,953       ---       ---       ---       ---       ---       ---     $ 15,953  
 
(1)           For the fiscal year ended December 31, 2009.
(2)           For the fiscal year ended December 31, 2010.
 
 
- 57 -

 
 
Option/SAR Grants in Last Fiscal Year
 
We did not grant any stock options to our executive officers or directors from inception through the date of this registration statement.
 
Director Compensation
 
We do not currently pay any compensation to our directors other than to Mr. Joseph Levinson, who receives annual cash compensation of $36,000, payable monthly.  We have found such payments to be necessary in order to attract US based directors who are experienced with Chinese companies, are familiar with the accounting differences between the two countries and who have access to US capital markets. As of the date of this registration statement, we have paid the cash compensation for the months of June and July.
 
We entered into Director Agreements with each of the four independent directors on June 13, 2011.
 
Executive Employment Contracts
 
Guangdong Xingbang has entered into employment agreements with Mr. Xiaohong and Mr. Haigang Song. Each of these employment agreements are based on the form labor contract as required by PRC labor contract laws.  The term of Mr. Yao*s employment is from July 18, 2007 to July 17, 2012 and Mr. Yao is paid a monthly salary of RMB 20,800 as the CEO and President. The term of Mr. Song*s employment is from January 1, 2011 to December 31, 2013. Mr. Song is paid a monthly salary of RMB9,000 as the CFO.  Under these agreements and the PRC labor laws, Guangdong Xingbang is obligated to pay the employee compensation equal to one month*s salary for each year Guangdong Xingbang has employed such employee, up to twelve years, upon termination, except, including but not limited to where (1) the employee is held to be criminally liable; (2) the employee*s actions or inactions have resulted in a material adverse effect to Guangdong Xingbang; (3) the employee seriously violated Guangdong Xingbang*s rule of conduct.
 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
We extended an interest free loan to Mr. Xiaohong Yao, our Chairman, CEO and President. The loan is unsecured and payable on demand. There is no written agreement regarding such transaction. The unpaid balance was $0, $89,707 and $114,361 as of September 30, 2011, December 31, 2010 and 2009, respectively.  Mr. Yao repaid all of the unpaid balance in July 2011.
  
Xingbang Culture, Zhongshan Xingbang, Guangdong Xingbang Career Training College (※Xingbang Training§) and  China Xingbang Industry Investment Group Limited (※Xingbang Investment§) each owned and controlled by Mr.Yao, our President, CEO and Chairman of the Board, have outstanding loans from us. Each loan is interest free, unsecured and payable on demand.  There are no written agreements reflecting such transactions.  As of September 30, 2011, Xingbang Investment owed Guangdong Xingbang $3,514. As of December 31, 2010 and 2009, Xingbang Culture owed $147,027 and $29,381, respectively, Zhongshan Xingbang owed $843,424 and $845,367, respectively, and Xingbang Training owed $151,648 and $0, respectively.
 
 
- 58 -

 
 
Our principal shareholders, Mr. Yao and Ms. Zhong borrowed RMB 3,180,000 and RMB 2,020,000 (an aggregate of $738,596) in 2007 and 2008 respectively from Shenzhen Development Bank. Both loans bear interest rate of the then effective prime rate announced by the People*s Bank of China (※PBOC§) plus 10% of the prime rate per annum.  Mr. Yao*s loan was collateralized by units 703 and Ms. Zhong*s loan was collateralized by unit 705 of West Tower, Star International Mansion, No.6-20 Jinsui Rd., Tianhe District, Guangzhou, Guangdong Province, which we rent as our corporate offices. Mr. Yao*s bank loan is due on April 15, 2011 and Ms. Zhong*s bank loan is due in August 2013. In the same year when they took the loan, Mr. Yao and Ms. Zhong loaned such proceeds to Guangdong Xingbang at the same interest rate and maturity dates as their respective loans from Shengzhen Development Bank.  As of December 31, 2009, the unpaid balance was $485,818. We paid back $485,818 in July 2010.
 
In 2010, we entered into a three-year (from January 1, 2010 to December 31, 2012) office lease agreement with Mr. Xiaohong Yao, our President, CEO and Chairman of the Board, and his wife, Ms. Dongmei Zhong, for part of our office space.  We are obligated to pay a monthly rent of approximately RMB 81,781.7 (approximately $12,467).  We believe the rent rate is based on fair market price. For the three months ended September 30, 2011 and 2010, we paid Mr. Yao and Ms. Zhong $38,241 and $36,310 for rentals of office premises. As of September 30, 2011 and December 31, 2010, rental prepaid to Mr. Yao and Ms. Zhong was $38,647 and $0 respectively.
 
From time to time, Guangdong Xingbang Shareholders and entities controlled by Mr. Yao borrow funds from Guangdong Xingbang.  Guangdong Xingbang borrows funds from the Guangdong Xingbang Shareholders when it is short of cash for operations.  All of the related party loans, except Xingbang Investment, are paid off as of the date of this S-1.
 
Other
 
Other than employment and the foregoing arrangements, none of the following persons has any direct or indirect material interest in any transaction to which we are a party since our incorporation or in any proposed transaction to which we are proposed to be a party: (i) any of Our directors or officers; (ii) any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our common stock; or any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary of our company.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of the date of this Registration Statement, there were 81,244,000 shares of common stock outstanding.  The following table sets forth certain information known to us with respect to the beneficial ownership of common stock as of that date by (i) each of our directors, (ii) each of our executive officers, and (iii) all of our directors and executive officers as a group.  Except as set forth in the table below, there is no person known to us who beneficially owns more than 5% of our common stock.
 
Name and Address
of Beneficial Owner
Number of Shares
Beneficially Owned (1)
Percentage of Class (2)
Xiaohong Yao
45,000,000 (3)
55.39%
Xiaole Zhan
8,000,000(4)
9.85%
Haigang Song
 --
 --
Joseph Levinson
 --
 --
Gangxian Su
 --
 --
Xingzheng Tan
 --
 --
Fei Wu
 --
 --
All directors and officers as a group (7 people)
53,000,000
65.24%
 
 
- 59 -

 
 
 (1) Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.
 
(2) The percentage of class is based on 81,244,000 shares of common stock issued and outstanding as of the date of this Registration Statement.
 
(3) Includes 44,999,000 shares of our common stock owned of record by Future Media International Limited and 1,000 shares of our common stock owned of record by Mr. Xiaohong Yao. Mr. Yao is the sole director of Future Media International Limited and the record holder of 90% of its capital stock and may be deemed beneficial owner of such shares. Ms. Dongmei Zhong, the wife of Mr. Yao holds 10% of the capital stock of  Future Media International Limited.
 
(4) Includes 8,000,000 shares of our common stock owned of record by World Achiever Limited. Xiaole Zhan is the sole director and holder of all of the capital stock of World Achiever Limited and thus may be deemed the beneficial owner of such shares.
 

DESCRIPTION OF SECURITIES
 
As of the date of this Registration Statement, we are authorized to issue 300,000,000 shares of common stock and 60,000,000 shares of preferred stock, par value $0.001 per share.  There are no outstanding shares of preferred stock.  As of the date of this Registration Statement, 81,244,000 shares of common stock were issued and outstanding.
 
Description of common stock .  The Registrant*s common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors.  Except as otherwise required by law, the holders of common stock will possess all voting power.  Generally, all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all shares of common stock that are present in person or represented by proxy.  Holders of common stock representing a majority of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders.  The Company*s Articles of Incorporation do not provide for cumulative voting in the election of directors.  Holders of common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to the common stock.

Transfer Agent and Registrar

The transfer agent for our common stock is Island Stock Transfer.  Our transfer agent*s address is 15500 Roosevelt Boulevard, Suite 301 Clearwater, Florida 33760.

SELLING STOCKHOLDERS
 
We are registering for the resale shares of our common stock held by the selling stockholders identified below.  We are registering the shares to permit the selling stockholders and their pledges, donees, transferees and other successors-in-interest that receive their shares from a selling stockholder as a gift, partnership distribution or other non-sale related transfer after the date of this prospectus to resell the shares when and as they deem appropriate.

The following table presents information as of the date of this prospectus and sets forth:

 
the name of the selling stockholders;
 
 
- 60 -

 
 
 
the number of shares of our common stock that may be offered for resale for the account of the selling stockholder under this prospectus;

 
the number and percentage of shares of our common stock that the selling stockholder beneficially owned prior to the offering for resale of the shares under this prospectus; and
 
Name of Selling Stockholders
 
Shares of
Common
Stock
Included In
Prospectus
   
Shares
Beneficially
Owned Prior
To Offering (1)
   
Percentage
of Shares
Before
Offering (1)
   
Shares
Beneficially
Owned After
Offering (2)
   
Percentage of
Shares After
Offering (2)
 
Dual Glory Limited (4)
   
448,000
     
3,200,000
     
3.94
%
   
2,752,000
     
3.39
%
Empire Star Group Limited (5)
   
448,000
     
3,200,000
     
3.94
%
   
2,752,000
     
3.39
%
Eternal Lead Limited (6)
   
448,000
     
3,200,000
     
3.94
%
   
2,752,000
     
3.39
%
Top Pearl Holdings Limited (7)
   
448,000
     
3,200,000
     
3.94
%
   
2,752,000
     
3.39
%
Rosy Period Limited (8)
   
504,000
     
3,600,000
     
4.43
%
   
3,096,000
     
3.81
%
Novel Brilliant Limited (9)
   
504,000
     
3,600,000
     
4.43
%
   
3,096,000
     
3.81
%
Magic Sail Limited (10)
   
420,000
     
3,000,000
     
3.69
%
   
2,580,000
     
3.18
%
EastPark Capital Group Limited (11)
   
560,000
     
4,000,000
     
4.92
%
   
3,440,000
     
4.23
%
Xiaobing Zhu
   
15,000
     
15,000
     
*
     
0
       0  
Jieru  Tan
   
4,000
     
4,000
     
*
     
0
        0  
Zhonggui  Liang
   
1,000
     
1,000
     
*
     
0
        0  
Xuezhu  Wu
   
1,000
     
1,000
     
*
     
0
        0  
Hongyun  Song
   
3,000
     
3,000
     
*
     
0
        0  
Zhenkun  Cai
   
1,000
     
1,000
     
*
     
0
        0  
Shu Huang
   
30,000
     
30,000
     
*
     
0
        0  
Jianliang  Zeng
   
6,000
     
6,000
     
*
     
0
        0  
Zhenguang Lu
   
3,200
     
3,200
     
*
     
0
     
0
 
JIan  Sheng
   
5,200
     
5,200
     
*
     
0
     
0
 
Ao  Tang
   
20,000
     
20,000
     
*
     
0
     
0
 
Xixing  Cong
   
3,000
     
3,000
     
*
     
0
     
0
 
Litao  Liu
   
1,500
     
1,500
     
*
     
0
     
0
 
Huiying  Feng
   
5,000
     
5,000
     
*
     
0
     
0
 
Deyong  Huang
   
8,000
     
8,000
     
*
     
0
     
0
 
Zehong  Han
   
4,000
     
4,000
     
*
     
0
     
0
 
Yan  Li
   
2,000
     
2,000
     
*
     
0
     
0
 
Wei  Zhang
   
1,000
     
1,000
     
*
     
0
     
0
 
Dongshuai Geng
   
3,000
     
3,000
     
*
     
0
     
0
 
Baoshu  Zhang
   
1,000
     
1,000
     
*
     
0
     
0
 
Weitan  Wang
   
10,000
     
10,000
     
*
     
0
     
0
 
Yong  Wang
   
1,000
     
1,000
     
*
     
0
     
0
 
Jixiang  Liu
   
500
     
500
     
*
     
0
     
0
 
Jialin He
   
500
     
500
     
*
     
0
     
0
 
Yong  Zhang
   
500
     
500
     
*
     
0
     
0
 
Huan Liang
   
2,500
     
2,500
     
*
     
0
     
0
 
Zuhui  Lu
   
1,000
     
1,000
     
*
     
0
     
0
 
Jian  Zhong
   
1,000
     
1,000
     
*
     
0
     
0
 
Jiacun  Huang
   
6,000
     
6,000
     
*
     
0
     
0
 
Jianhua  Zhou
   
1,000
     
1,000
     
*
     
0
     
0
 
Tangyong Liu
   
10,000