ADVANCE TO SUPPLIERS - Note 7

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

ADVANCE TO SUPPLIERS - Note 7

NOTE 7 — ADVANCE TO SUPPLIERS

As of September 30, 2011 and December 31, 2010, the Company's advance to suppliers consisted of the following:

	September 30, 2011		December 31, 2010
			(Audited)
Yuechangrui	$	23,492,974	$	-
Media Tak Inc.	122,894		-
CEC CoreCast Technology Co., Ltd. ("CECCC")		9,407,976		7,734,980
Shenzhen Nanxin Communication Equipment Co., Ltd.		781,030		-
Shenzhen Futian District Longchengfa Electronic Co., Ltd.		624,824		-
Shenzhen Baoan District Shiyan Jixintong Commercial & Trade Co. ("SBDSJCTC")				6,851,051
Tsingtao Hisense Portable Communication Tech Co.,Ltd.				245,762
Shenzhen United Lifeng Supply Chain Management Co., Ltd.		233,999		-
Shenzhen Wuxing Commercial & Trade Co.		8,310,597		3,729,695
Shenzhen Fudian District Longchengfa Electronic Commercial Co.				604,979
Jiangxi TongGuJiangQian		478,000		-
Foshan Import and Export		1,788,985		-
Dewav Technology		877,650		-
Foshan Tianjia Import		2,513,000		-
YTone		538,930		-
Konka		332,110		-
Others		722,628		555,825
Total advance to suppliers	$	50,225,597	$	32,776,983

The Company made bank note payments to CECCC in advance of purchasing of material and the amounts as mentioned above are scheduled to deliver materials between December 20, 2011 and March 20, 2012. The advance payments are intended to ensure preferential pricing.

The Company purchased parts for mobile phone manufacturing from SBDSJCTC which delivered those parts to the Company with the balance of funds completely returned as of September 30, 2011.

The Company purchased mobile phones components and sub-assemblies from Yuechangrui with delivery terms range from three to nine months from the date of payment.

The Company signed a purchase agreement with Shenzhen Wuxing Commercial & Trade Co. for the supply of components for the E33 mobile phone. These components are to be delivered during the fourth quarter of 2011 and the first quarter of 2012.