MERGER AND ACQUISITIONS - Note 3

9 Months Ended

Sep. 30, 2013

Notes to Financial Statements

MERGER AND ACQUISITIONS - Note 3

NOTE 3 - MERGER AND ACQUISITIONS

The Company acquired 100% equity in Silver Tech on May 31, 2010. As of May 31, 2010, the net assets of Silver Tech were $2,564,160. The purchase consideration was $10,960,000 which resulted in goodwill of $8,395,840. As of December 31, 2012, the Company has taken action to dispose of Silver Tech's operating subsidiaries Ever Elite and Nollec; accordingly, all goodwill related to Silver Tech has been written off.

The Company acquired 100% ownership of CDE on January 4, 2011. As of January 4, 2011, the net liabilities of CDE were $43,409. The purchase consideration was $1,818,000 which resulted in goodwill of $1,861,409. As of December 31, 2012, as part of the Company's disposal of Profit Harvest the Company has indirectly disposed of CDE, accordingly, all of the goodwill related to CDE has been written off.

The Company acquired 55% ownership of Portables on October 11, 2011. As of October 11, 2011, Portables' liabilities exceeded its assets by $9,290,241. The purchase consideration was $9,851,486 which resulted in goodwill of $27,005,953. The Company acquired Portables for two reasons; (a) to diversify its revenue sources, and (b) to gain access to the most mature mobile handset market in the world. The Company's ownership in Portables had been reduced to 50.1% as of December 31, 2012. At July 15, 2013, the Company was in default of a loan with Portables Unlimited, Inc. and during the three months ended September 30, 2013, the Company decided to write down its investment in Portables. See "Note 1 - Organization and Nature of Business Operations - Dispositions", for further details.

The following table summarizes goodwill as of September 30, 2013 and December 31, 2012 resulting from the acquisitions of Jiangsu Leimone, Silver Tech, and CDE:

		September 30,		December 31,
		2013		2012
		(Unaudited)
Jiangsu Leimone	$	103,057	$	103,057
Silver Tech		8,395,840		8,395,840
CDE		1,861,409		1,861,409
Portables		27,031,492		27,031,492
Total		37,391,798		37,391,798
Less: Impairment		(37,391,798)		(37,391,798)
Total goodwill	$	-	$	-