RELATED PARTY TRANSACTIONS - Note 18

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

RELATED PARTY TRANSACTIONS - Note 18

NOTE 18 — RELATED PARTY TRANSACTIONS

Due from related parties

As of December 31, 2011 and 2010, due from related parties were:

	December 31, 2011		December 31, 2010
Due from related parties - short term
Tianjin Tong Guang Group Electronics Science & Technology Co., Ltd.	$	3,883,641	$	26,085
Beijing Leimone Shengtong Wireless Technology Co., Ltd.	167,172		232,614
Leimone (Tianjin) Industrial Co., Ltd.	20,473,338		16,338,738
Beijing Leimone Shengtong Cultural Development Co., Ltd.	2,744,697		703,042
Tianjin Tong Guang Group	379,994		557,325
Shenzhen Leimone	429,170		328,694
712 (Prior Shareholder)	992,815		870,076
Raja. R Amar - Chief Executive Officer of Portables	741,448		-
Others	613,425		-
Total due from related parties	$	30,425,700	$	19,056,574

Tianjin Tong Guang Group Electronics Science & Technology Co., Ltd. ("Electronics Science & Tech"), an entity related to the Company through a common shareholder of TCB Digital, purchased products from the Company. For 2011 and 2010, the Company recorded revenues of $36,890,501 and $15,067,119 from sales to Electronics Science & Tech respectively.

Beijing Leimone Shengtong Wireless Technology Co., Ltd. ("Beijing Leimone") was founded by Gu, the largest shareholder of the Company. Beijing Leimone borrows money from the Company. The borrowings bore no interest and had a maturity of 12 months.

Leimone (Tianjin) Industrial Co., Ltd. ("Tianjin Leimone") was controlled by Gu, the largest shareholder of the Company. Tianjin Leimone sells raw materials to the Company. For 2011 and 2010, the Company recorded total purchases from Tianjin Leimone of $93,076,912 and $63,864,174 respectively. The amount due from Tianjin Leimone represented advances of $13,708,030and $9,780,893 as of December 31, 2011 and 2010 respectively. The Company also sold certain products to Tianjin Leimone. In addition, Tianjin Leimone borrowed money from the Company and these borrowings bore no interest. As of December 31, 2011 and 2010, the balance of such loans was $6,765,308and $6,557,845 respectively.

The amount due from Beijing Leimone Shengtong Cultural Development Co., Ltd. ("Beijing Leimone Cultural") for short term loan granted by the Company. Beijing Leimone Cultural was controlled by Gu. The borrowing bore no interest and is due on demand.

Tianjin Tong Guang Group, a 20% shareholder of our TCB subsidiary, borrowed money from the Company. The borrowings bear no interest and are due on demand.

712 was a minority shareholder of TCB Digital before Mr. Gu exercised the option to acquire 29.0% of TCB Digital. (See note 1.) 712 purchases raw materials from the Company. For 2011 and 2010, the Company recorded revenues from sales to 712 of $22,553,654 and $24,015,118 respectively. As of December 31, 2011 and 2010, the balance of such sales was $796,419 and $681,020 respectively. In addition, the Company purchases raw materials from 712. For 2011 and 2010, the Company recorded purchases from 712 of $22,273,747 and $27,584,361 respectively. 712 was no longer a related party of the Company after Mr. Gu exercised his option to acquire the additional 29.0% of TCB Digital in March 2010.

Shenzhen Leimone Company, Ltd., formed by individuals including our Chairman, Mr. Gu, is set up with the intention of providing manufacturing services to our Company particularly for exports. $408,831 and $328,649 as of December 31, 2011 and 2010 was a loan to Shenzhen Leimone for setup costs. Our Chairman, Mr. Gu, plans to personally fund the cost of equipment as his investment into Shenzhen Leimone and become the controlling shareholder of Shenzhen Leimone. The Company purchased raw materials from Shenzhen Leimone in 2011. The balance as of December 31, 2011 was advance to Shenzhen Leimone amounted to $20,339. In addition, for 2011 and 2010, the Company recorded revenues from sales to Shenzhen Leimone of $153,695 and Nil respectively.

The amounts due from Raja R Amar are related to loans made to Raja R Amar by Portables prior to its acquisition by Zoom. The loans are interest free and are unsecured and are expected to be repaid by December 31, 2012.

Due to related parties

As of December 31, 2011 and 2010, due to related parties was:

	December 31, 2011		December 31, 2010
Tianjin Tong Guang Group Special Equipment Co., Ltd.	$	-	$	3,781
Gu		2,788,635		2,880,559
AUM Realty, Inc.		269,049
Wireless Holdings of Northeast		117,600
Portables Unlimited International		2,633,147
Portables Unlimited, Inc.		650,000
Others		283,943
Total due to related parties	$	6,742,373	$	2,884,340

The Company borrowed money from Hui Pak Kong, a prior shareholder of CDE before the Company's acquisition on January 4, 2011. The borrowings bear no interest and are due on demand. As of December 31, 2011 and 2010, the balance of such loans was $277,943 and Nil respectively.

Gu provides fund to the Company with no interest and are due on demand. As of December 31, 2011 and 2010, the balances of funds provided by Gu was $2,788,635 and $2,880,559 respectively.

In January 2011, the Portables entered into a line of credit agreement with a Portables Unlimited International for $3,000,000. Interest on the line is due and payable on demand at 5.6%. The unpaid balance as of December 31, 2011 was $2,633,147. Total interest expenses on the line amounted to $42,866 for the period October 12, 2011 through December 31, 2011.

Portables received advances from one of its non-controlling owner, Portables Unlimited, Inc., totaling $650,000. The advance has an interest rate of 12% per annum and is due on demand.