13. Acquisition of EZ Link Holdings, Ltd.

12 Months Ended

Dec. 31, 2011

Business Combination Disclosure [Text Block]

13.               Acquisition of EZ Link Holdings, Ltd.

In March 2009, International Packaging and Logistics Group, Inc. (“IPL Group Inc.”)  announced the acquisition of EZ Link Corporation,(“EZ Link”), which is a logistics company headquartered in Taiwan. EZ Link was established in July 2003 under the laws of Taiwan, Republic of China.   EZ Link Holdings, Ltd., a company organized under the laws of the British Virgin Islands, controls EZ Link Corporation through a contractual arrangement.  IPL Group, Inc. acquired 51% of EZ Link Holdings Ltd through the issuance of common stock and Series B preferred stock.   EZ Link is a full service international freight forwarder, who has current networks to locations in China, Hong Kong, South East Asia, North East Asia, North America, Latin America and Europe.

Capitalization of Purchase Price

(a) Approximately 53% of the Purchase Price amount $457,143 was paid in common shares of the Company as of the closing date based on a per share value of $1.00.

(b) Approximately 47% of the Purchase Price amount $400,000 was paid in Series B Convertible Preferred Shares which will be convertible into shares of the Company’s common shares on a one for one basis.  The preferred shares were valued at $1.00 per share and are convertible pursuant to the terms and conditions specified in the acquisition agreement.

On January 1, 2010, the Company obtained controlling interest in EZ Link Holdings, Ltd. by purchasing outstanding shares for $857,143, in common and preferred stock.  The purchase price was allocated to the assets acquired based on the fair values at the acquisition date. The intangible asset acquired was valued at $1.3 million using a multiple of gross margin pricing.  Negative goodwill represents the excess of fair value of the net identifiable assets acquired over the purchase price.  Negative goodwill was insignificant at the acquisition date.  The financial results of EZ Link Holdings, Ltd. are included in these financial statements beginning on January 1,  2010, the date control was acquired, in accordance with the accounting guidance for business combinations.  The purchase price was allocated as follows:

Cash and cash equivalents	$	586,041
Accounts receivable		1,014,999
Other current assets		66,098
Property and Equipment		22,478
Deposits		18,654
Total Assets		1,708,270
Accounts payable and accrued expenses		1,197,575
Notes payable		125,748
Total Liabilities		1,323,323
Contract in place		1,295,726
Net Assets Acquired	$	1,680,673
Fair value of common stock	$	457,143
Fair value of Series B preferred stock		400,000
Fair value of non controlling interest		823,530
Fair value of Consideration Paid	$	1,680,673

The capital stock of the EZ Link Holdings, Ltd. consists of 50,000 authorized shares of common stock, $1.00 par value, of which 24,500 shares were issued and outstanding at December 31, 2009. EZ Link Holdings, Ltd. sold 51% of its shares, or 25,500 common shares to IPL Group., EZ Link Holdings, Ltd is a majority owned subsidiary of IPL Group.  Since the Company acquired a 51% controlling interest, the remaining 49% is accounted for as non controlling interest.