NET INCOME PER SHARE

12 Months Ended

Dec. 31, 2011

NET INCOME PER SHARE

Basic income per share is calculated using the weighted average number of shares of common stock outstanding during the period. Diluted income per share assumes the conversion, exercise or issuance of all potential common stock instruments, such as warrants and convertible debt, unless the effect is anti-dilutive.

The following is a reconciliation of the denominators for the weighted average number of shares outstanding used in the calculation of basic income per share for the years ended December 31, 2009, 2010 and 2011:

	2009		2010		2011

Shares issued beginning of period		1		2,361,716		3,285,007
Effect of reverse merger (1)		22,493,474		20,131,759		20,131,759
Weighted average shares issued during year		-		85,607		376,198

Basic weighted average shares – end of year		22,493,475		22,579,082		23,792,964

(1)

Earnings per share for periods prior to the reverse merger have been restated to reflect the equivalent number of shares to be received pursuant to the Share Exchange by the Waibo shareholders.

The following is a reconciliation of the denominators for the weighted average number of shares outstanding used in the calculation of diluted income per share for the years ended December 31, 2009 , 2010 and 2011:

	2009		2010		2011

Basic weighted average shares – end of year		22,493,475		22,579,082		23,792,964
Effect of convertible debt		-		114,145		210,606

Basic weighted average shares – end of year		22,493,475		22,693,227		24,003,570

As of December 31, 2010 and 2011 the Company had warrants outstanding to purchase 171,536 shares of common stock, which were considered anti-dilutive as the exercise prices of the warrants exceeded the average market price of the Company’s common stock. As of December 31, 2009, the Company had no potentially dilutive securities outstanding.

- Definition

The entire disclosure for earnings per share.

+ References+ Details

KAIBO FOODS Co Ltd 10-K