ACCRUED EXPENSES AND OTHER PAYABLES - Note 16

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

ACCRUED EXPENSES AND OTHER PAYABLES - Note 16

NOTE 16 — ACCRUED EXPENSES AND OTHER PAYABLES

As of December 31, 2011 and 2010, the accrued expenses and other payables of the Company were summarized as follows:

	2011			2010
Accrued filing fees	$	445,391		$	347,558
Accrued rework cost	215,560			229,472
Accrued consulting fee	-			51,038
Accrued commission payable	4,616,079
Acquisition payable*	1,662,500			152,500
Accrued expenses	2,686,016
Welfare & salary payable	341,137			271,787
Others	207,029			118,597
Total accrued expenses and other payables	$		10,173,712	$	1,170,952

*Current portion of acquisition payable related to our acquisition of Nollec Wireless on June 1, 2010 of $290,000 and Portables on October 11, 2011 of $1,350,000 (see Note 1).

Pursuant to the terms of purchase agreement, in case Zoom and/or Zoom Sub does not pay the T-Mobile liabilities of Portables which were assumed in the transaction, (collectively, the "Cash Payments") in full and arrange for the Letter of Credit within the Payment Period (30 days after the closing), then the unpaid portion of the Cash Payments shall incur interest at an annual rate of 2% during the 60-day period following the Payment Period (the end of such 60-day period shall be the "Final Payment Date"). Subject to Recission Remedy, in the event the Cash Payments are not made in full and the Letter of Credit is not arranged for by Zoom and/or Zoom Sub by the Final Payment Date, then a percentage of the Portables shall be returned by Zoom Sub to Portables, effective immediately following the Final Payment Date, based on the certain formula as stipulated in the purchase agreement. The Company currently is in default of this payment. On April 13, 2012, we received notice that we are in default on the Securities Purchase Agreement. The Securities Purchase Agreement provides that if we are in default, the Company's ownership of Portables will be reduced from 55% to 46%. In such event, the Company will account for the investment in Portables using the equity method. The Securities Purchase Agreement provides that in case of a default by the Company, CNCG will be entitled to enforce certain rescission rights against the Company, as more fully described in the Securities Purchase Agreement. Also, in case of a default, Portables, CNCG and the other member of Portables may bring claims for indemnification against the Company for a breach under the Securities Purchase Agreement, as more fully described in the Securities Purchase Agreement.

Accrued commission payable reflects commissions earned by and payable to store operators based on monthly commission reports from T-Mobile.

Accrued expenses include a $2.4 million retention bonus payable to certain executives of Portables for services rendered prior to the acquisition.