PURCHASE DEPOSIT - Note 8

6 Months Ended

Jun. 30, 2012

Notes to Financial Statements

PURCHASE DEPOSIT - Note 8

NOTE 8 - PURCHASE DEPOSIT

As of June 30, 2012 and December 31, 2011, the Company's purchase deposit consisted of the following:

	June 30, 2012		December 31, 2011
	(Unaudited)		(Audited)
Shenzhen Wuxing Commercial & Trade Co.	$	5,435,989	$	7,135,266
Shenzhen Nanxin Communication Equipment Co., Ltd.		791,177		785,583
Shenzhen Futian District Longchengfa Electronic Co., Ltd.		632,942		628,466
Total purchase deposit	$	6,860,108	$	8,549,315

These three suppliers provide purchasing platforms. The purchase deposits are paid to ensure the Company is able to purchase components at competitive price. These deposits are refundable during the normal course of business and do not represent any commitment.

The Company signed a purchase agreement with Shenzhen Wuxing Commercial & Trade Co. for the supply of components for the E33 mobile phone. These components have been delivered during the fourth quarter of 2011 and the first half year of 2012. The amounts are advanced under such arrangements as of June 30, 2012.

As of June 30, 2012, contracts with suppliers to use purchase platform were expired and not renewed. The Company has not recovered all of the deposits and it is pursuing their recovery. The recovery of these amounts is still expected, accordingly, no allowance for non-recovery has been accrued.