RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2013

RELATED PARTY TRANSACTIONS [Text Block]

12. RELATED PARTY TRANSACTIONS

Due to related parties

Due to related parties consisted of the following:

		As of December 31,
		2013		2012
Loanofficers and shareholders	$	1,917,958	$	1,120,059
Loan from Shaanxi Yanfeng Real Estate Co., Ltd.		409,018		396,284
Loan from Xi'an Yanfeng Biotechnology Co., Ltd.		376,297		364,582
Loan from Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd.		181,690		114,130
Shaanxi Chaoying Personal Care Group Co., Inc		78,531		76,087
Total	$	2,963,494	$	2,071,142

Mr. Yanbiao Bai owns 64% and is the CEO and Chairman of Shaanxi Chaoying Beauty & Cosmetics Group. Mr. Bai is the Chairman of Shaanxi Yangfeng Real Estate and Xi'an Yanfeng Biotechnology. The above amounts of due to relate parties were unsecured, interest free, and due on demand.

Lease agreement

The Company’s subsidiary in the PRC leased an office space under an operating lease agreement from Shaanxi Chaoying Beauty & Cosmetics Group Co., Ltd. for a lease term originally expired on December 31, 2009, and had been extended to December 31, 2015. The rent payment under this operating lease was $6,458 (equivalent to RMB40,000) per month. The total future minimum lease payments for this lease as of December 31, 2013 were $154,992.

Future minimum lease payments under operating leases with initial or remaining terms of one year or more are as follows:

For the Years Ended December 31,		Amount
2014	$	77,496
2015		77,496
Total	$	154,992

Total rental expense charged to operations amounted to $77,496 and $70,537 for the years ended December 31, 2013 and 2012, respectively.

Operation of SPA business

In January 2011, SD Chaoying engaged Dongshan Victoria Spring Hotel (“Victoria”), which is controlled by the wife of the General Manager of SD Chaoying, to manage and operate the SPA business at the completed section of the cultural and entertainment facility. SD Chaoying has not charged any fees from Victoria and no written agreement was signed. As a result, no revenue was recognized for the years ended December 31, 2013 and 2012. Costs related to operating commercial rental amounted to $50,485 and $65,846 for the years ended December 31, 2013 and 2012, respectively.