Note 19 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2011

Commitments and Contingencies Disclosure [Text Block]

Note 19 - Commitments and Contingencies

Rents

Nova Macao leased an office in Macao under a one-year, automatically renewable lease agreement on May 1, 2010, with an expiration date of April 30, 2011. The monthly rent under this lease was approximately $1,100 (HKD 9,000). The lease agreement renews automatically on an annual basis on its anniversary date. On May 1, 2011, the lease agreement renewed automatically with an expiration date of April 30, 2012. As of September 30, 2011, future rental payment of remaining period until expiration under this operating lease is approximately $11,000. Total rental expense was $10,396 and $10,296 for the nine months ended September 30, 2011 and 2010, respectively, and $3,465 and $3,409 was for the three months ended September 30, 2011 and 2010, respectively.

On August 6, 2011, Diamond Bar leased a warehouse and office in California, U.S., under a three-year renewable lease agreement. The monthly rent under this lease was $38,100. Total rental expense since the Company acquired Diamond Bar was $38,100 for nine and three months ended September 30, 2011.

On January 1, 2011, Diamond Bar leased a show room in Las Vegas, Nevada, under a three-year, renewable lease agreement. The monthly rent was $3,949. Total rental expense since the Company acquired Diamond Bar was $7,898 for the nine and three months ended September 30, 2011.

Capital Contribution

Nova Dongguan’s total registered capital is $20 million. As of September 30, 2011, and December 30, 2010, Nova Dongguan has received $11.89 and $10.90 million in capital contributions, respectively. The remaining $8.11 million of additional capital contribution is due by November 16, 2011. The Company is in the process of applying for an extension of the payment period, as allowed by PRC regulations for foreign-invested enterprises. The Company also may apply for a reduction of the registered capital requirement. If the Company does not receive an extension or reduction of registered capital, and is unable to make the required capital contribution to registered capital, Nova Dongguan may be subject to a negotiated penalty related to the unsatisfied portion of registered capital.

Employment Agreements

On June 30, 2011, the Company entered into a one-year employment agreement with Ya Ming Wong to serve as the Company’s Chief Executive Officer. The agreement provides for an annual salary of USD$100,000 and an annual bonus at the sole discretion of the Board, or any committee duly designated by the Board and authorized to act.

On June 30, 2011, the Company entered into a one-year employment agreement with Yuen Ching Ho to serve as the Company’s Chief Financial Officer. The agreement provides for an annual salary of USD$80,000 and an annual bonus at the sole discretion of the Board, or any committee duly designated by the Board and authorized to act.

On June 30, 2011, the Company entered into a one-year employment agreement with Thanh H. Lam to serve as the Company’s president. The agreement, as amended effective as of September 1, 2011, provides for an annual salary of USD$80,000 and an annual bonus at the sole discretion of the Board, or any committee duly designated by the Board and authorized to act.