DISCONTINUED OPERATIONS - Note 23

3 Months Ended

Mar. 31, 2013

Other income (expenses)

DISCONTINUED OPERATIONS - Note 23

NOTE 23 - DISCONTINUED OPERATIONS

On December 31, 2012, the Company announced its plan to dispose of certain assets in order to raise cash, and redeploy cash for investment in North America.

Results of Operations	For the Three Months Ended March 31,
	2013		2012
	(Unaudited)		(Unaudited)
Net revenues		42,257,043		75,019,208
Cost of sales		40,241,554		71,448,789
Gross profit		2,015,489		3,570,419
Operating expenses		1,650,821		1,854,853
Operating income (loss)		364,668		1,715,566
Other income (expenses), net		(702,175)		(280,971)
(Loss) income before taxes from discontinued operations		(337,507)		1,434,595
less: Provision for income taxes		21,061		346,910
(Loss) income from discontinued operations, net of tax		(358,568)		1,087,685
Basic and diluted (loss) income per common share from discontinued operations:
Basic		(0.01)		0.05
Diluted		(0.01)		0.05

Financial Position	March 31,		December 31,
	2013		2012
	(Unaudited)
Cash and equivalents	$	4,522,371	$	3,245,529
Restricted cash		88,341,386		64,467,142
Accounts receivable, net		35,050,193		35,642,961
Inventories, net		8,033,191		7,059,829
Other receivables and prepaid expenses		10,926,755		10,580,693
Advance to suppliers		3,991,536		3,004,016
Notes receivable		1,782,855		548,218
Due from related parties		21,618,261		18,322,784
Construction in progress deposit - related parties		230,809		243,747
Property, plant and equipment, net		1,137,461		1,293,689
Intangible assets, net		315,757		342,682
Total current assets		175,950,575		144,751,290
Total Assets of Discontinued Operations	$	175,950,575	$	144,751,290
Short-term loans		25,608,946		21,187,680
Notes payable		53,427,536		28,156,022
Accounts payable		11,702,618		16,255,076
Accrued expenses and other payables		995,984		1,013,986
Advances from customers		1,943,637		1,039,775
Taxes payable		(1,545,197)		(2,341,883)
Interest payable		121,561		110,835
Dividends payable		632,352		628,890
Due to related parties		76,972,633		72,298,478
Total current liabilities		169,860,070		138,348,859
Total Liabilities of Discontinued Operations		169,860,070		138,348,859
Net Assets of Discontinued Operations	$	6,090,505	$	6,402,431

The sale of all of the business operations to Beijing Zhumu Culture Communication Company, Ltd. covered in the Share Purchase Agreement as described in "Note 1 - Organization and Nature of Business Operations" was for approximately $31.7 million (RMB 200 million) in sales proceeds. The Share Purchase Agreement covers the sale of several business operations in different jurisdictions, with differing regulatory requirements regarding the purchase and sale of businesses. The table of above details the portion of the transaction related to the sale of Profit Harvest and CDE, which closed on December 31, 2012, for proceeds of $23.0 million. The portion of the sale covered in the Share Purchase Agreement for Ever Elite and Nollec Wireless generated proceeds of $500,000. This sales transaction closed on April 5, 2013. The balance of the sales proceeds, approximately $8.2 million will be allocated to TCB Digital upon the closing of that transaction, which is expected in the second quarter of 2013.