NOTE 7 - CONTRACT RIGHTS DEPOSIT

12 Months Ended

Dec. 31, 2012

Long-term Contracts or Programs Disclosure [Text Block]

NOTE 7 – CONTRACT RIGHTS DEPOSIT

The contract right was purchased from AT&M for $1,427,665 (RMB9,000,000) to guarantee the supply of amorphous raw material for 5 years starting from the first date of supplying raw material by AT&M. The contract rights deposit is amortized based on the proportion of actual purchase quantity to the estimated total purchase quantity over the 5-year period starting from the date of first purchase from AT&M.

In the years ended December 31, 2012 and 2011, $283,185 and $149,815 of the contract rights deposit were amortized and recorded in cost of goods sold, respectively.

The Company conducted the evaluation for the impairment of the asset at December 31, 2012 and concluded that no impairment is needed to be recorded as of the date of evaluation.