RELATED PARTY TRANSACTIONS - Note 11

3 Months Ended

Mar. 31, 2013

Notes to Financial Statements

RELATED PARTY TRANSACTIONS - Note 11

NOTE 11 - RELATED PARTY TRANSACTIONS

Due from related parties

As of March 31, 2012 and December 31, 2012, due from related parties were:

	March 31,		December 31,
Due from related parties	2013		2012
	(Unaudited)
Beijing Leimone Shengtong Wireless Technology Co., Ltd.	$	71,809	$	91,571
Leimone (Tianjin) Industrial Co., Ltd.		11,075,639		11,034,982
Shenzhen Leimone		344,414		355,564
Raja R Amar - Chief Executive Officer of Portables		429,877		429,877
Spreadzoom		9,046,038		9,046,038
Others		-		5,993
Total due from related parties	$	20,967,777	$	20,964,025

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. The balances are neither collateralized nor personally guaranteed by Gu.

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. As of March 31, 2013 and December 31, 2012, the amounts due from Tianjin Leimone of $11,075,639 and $11,034,982 represented advances for purchases arising in the normal course of business for transaction prior to December 31, 2012. The difference in balances between March 31, 2013 and December 31, 2012, represents the fluctuation of exchange rates between the functional and reporting currency.

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. $344,414 and $355,564 as of March 31, 2013 and December 31, 2012 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 difference in the balances from March 31, 2013 and December 31, 2012 represents payment made by Shenzhen Leimone to the Company to reduce its outstanding balance.

The amount of $429,877 due from Raja R Amar at March 31, 2013 and December 31, 2012, is related to loans made to Raja R Amar by Portables prior to its acquisition by Zoom. The loans are interest free and are unsecured.

The balance due from SpreadZoom represents an advance to SpreadZoom for it to purchase components to manufacture handsets in the normal course of business. The advance bears no interest, and is uncollateralized. The difference in balances between March 31, 2013 and December 31, 2012, represents the fluctuation of exchange rates between the functional and reporting currency. Such advances are only expected to occur during these early setup stages of the business because once the company becomes fully capitalized it will have sufficient working capital to procure components, and advances will be reimbursed in to the Company.

Due to related parties

As of March 31, 2013 and December 31, 2012, due to related parties were:

	March 31,		December 31,
Due to related parties	2013		2012
	(Unaudited)
Mr. Lei Gu	$	2,901,283	$	2,901,283
Anthony Chan		397,901		358,814
Beijing Leimone Shengtong Cultural Development Co., Ltd.		102,500		102,500
Wireless Holdings of Northeast		117,600		117,600
Portables Unlimited International		1,304,864		3,779,864
Portables Unlimited, Inc.		2,559,112		2,559,112
AUM Realty, Inc.		63,364		69,864
Total due to related parties	$	7,446,624	$	9,889,037

Mr. Gu provides fund to the Company with no interest and are due on demand. As of March 31, 2013 and December 31, 2012, the balances of funds provided by Gu was $2,901,283 and $2,901,283 respectively.

Mr. Anthony Chan provides fund to the Company with no interest and are due on demand. As of March 31, 2013 and December 31, 2012, the balances of funds provided by Chan were $397,901 and $358,814, respectively.

In January 2011, the Portables entered into a line of credit agreement with a Portables Unlimited International for a total of $5,000,000. Interest on the line is due and payable on demand at 5.6%. The unpaid balance as of March 31, 2013 and December 31, 2012 was $1,304,864 and $3,779,864 respectively.

Portables received advances from its non-controlling owner, Portables Unlimited, Inc., totaling $3,265,012 and $2,559,112 at March 31, 2013 and December 31, 2012. These advances carry an interest rate of 12% per annum and are due on demand.

AUM Realty, Inc. is controlled by certain member of Portables. The outstanding balance represents outstanding rent owed to AUM. The amounts are due upon demand. Refer to "Note 21 - Commitments" for more details.