ADVANCE TO SUPPLIERS - Note 7

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

ADVANCE TO SUPPLIERS - Note 7

NOTE 7 — ADVANCE TO SUPPLIERS

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

	December 31, 2011		December 31, 2010
Yuechangrui	$	7,399,939	$	-
Media Tak Inc.	123,610		-
CEC CoreCast Technology Co., Ltd. ("CECCC")		-		7,734,980
Shenzhen Baoan District Shiyan Jixintong Commercial & Trade Co. ("SBDSJCTC")		-		6,851,051
Tsingtao Hisense Portable Communication Tech Co.,Ltd.		-		245,762
Shenzhen Wuxing Commercial & Trade Co.		-		3,729,695
Shenzhen Fudian District Longchengfa Electronic Commercial Co.		-		604,979
Jiangxi TongGuJiangQian		478,000		-
Foshan Import and Export		129,384		-
Dewav Technology		877,650		-
Qualcomm		101,181		-
Konka		79,852		-
Other - multiple vendors of various amounts		644,401		555,825
Total advance to suppliers	$	9,834,017	$	32,776,983

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 December 31, 2011.

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

The Company made bank note payments to CEC CoreCast Technology Co., Ltd in advance of purchasing of material. The advance payments are intended to ensure preferential pricing. The amounts are advanced under such arrangements as of December 31, 2010. See Note 15 for notes payable details.