Related Party Transactions

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note 7. Related Party Transactions

Related party receivables are payable on demand upon the same terms as receivables from unrelated parties.

Transactions with Aristo Technologies Limited / Mr. Yang

This represented Aristo transactions with various related parties of Mr. Yang.

As of March 31, 2013 and December 31, 2012, we had an outstanding receivable from Aristo / Mr. Yang, the Chairman of our Board of Directors, totaling $3,877,173 and $3,658,359, respectively. These advances bear no interest and are payable on demand. The receivable due from Aristo / Mr. Yang to the Company is derived from the consolidation of the financial statements of Aristo, a variable interest entity, with the Company. A repayment plan has been entered with Mr. Yang.

Transactions with Solution Semiconductor (China) Limited

Mr. Yang is a director and the sole beneficial owner of the equity interests of Solution Semiconductor (China) Ltd. (“Solution”).

During the three months ended March 31, 2013 and 2012, we received service fee of $3,846 and $0 respectively, from Solution. The service fee was charged for back office support for Solution.

During the three months ended March 31, 2013 and 2012, we sold products of $15,833 and $698 respectively, to Solution. As of March 31, 2013 and December 31, 2012, there were no outstanding accounts receivables from Solution.

Two facilities located in Hong Kong owned by Solution were used by the Company as collateral for loans from DBS Bank (Hong Kong) Limited (“DBS Bank”) (formerly Overseas Trust Bank Limited) and The Bank of East Asia, Limited (“BEA Bank”) respectively.

Transactions with Systematic Information Limited

Mr. Yang, the Company’s Chairman of the Board of Directors, is a director and shareholder of Systematic Information Ltd. (“Systematic Information”) with a total of 100% interest.

During the three months ended March 31, 2013 and 2012, we received service fee of $1,846 and $2,038 respectively, from Systematic Information. The service fee was charged for back office support for Systematic Information.

During the three months ended March 31, 2013 and 2012, we sold products for $327,115 and $0 respectively, to Systematic Information. As of March 31, 2013 and December 31, 2012, there were no outstanding accounts receivables from Systematic Information.

A workshop located in Hong Kong owned by Systematic Information was used by the Company as collateral for loans from BEA Bank.

Transactions with Atlantic Storage Devices Limited

Mr. Yang is a director and 40% shareholder of Atlantic Storage Devices Ltd. (“Atlantic Storage”). The remaining 60% of Atlantic Storage is owned by a non-related party.

During the three months ended March 31, 2013 and 2012, we sold products for $0 and $20,553 respectively, to Atlantic Storage. As of March 31, 2013 and December 31, 2012, there were no outstanding accounts receivables from Atlantic Storage.

Transactions with City Royal Limited

Mr. Yang, the Company’s Chairman of the Board of Directors, is a 50% shareholder of City Royal Limited (“City”). The remaining 50% of City is owned by the wife of Mr. Yang. A residential property located in Hong Kong owned by City was used by the Company as collateral for loans from DBS Bank.

Transactions with Aristo Components Limited

Mr. Ben Wong appointed as new Chief Executive Officer on February 1, 2013. He is a 90% shareholder of Aristo Components Ltd. (“Aristo Comp”). The remaining 10% of Aristo Comp is owned by a non-related party.

During the three months ended March 31, 2013 and 2012, we received a service fee of $3,077 and $0 respectively, from Aristo Comp. The service fee was charged for back office support for Aristo Comp.

During the three months ended March 31, 2013 and 2012, we purchased inventories of $0 and $39,107 respectively, from Aristo Comp. As of March 31, 2013 and December 31, 2012, there were no outstanding accounts payable to Aristo Comp.

Transactions with Atlantic Ocean (HK) Limited

Mr. Yang is a director and 60% shareholder of Atlantic Ocean (HK) Limited (“Ocean”).

During the three months ended March 31, 2013 and 2012, we sold products for $7,070 and $0 respectively, to Ocean. As of March 31, 2013 and December 31, 2012, there were no outstanding accounts receivables from Ocean.

Transactions with ATMD (Hong Kong) Limited

Effective April 1, 2012, ATMD became a jointly-controlled entity of the Company. The Company holds a 30% interest of ATMD, the remaining 70% interest is owned by Tomen.

During the three months ended March 31, 2013 and 2012, we received service fee of $24,781 and $0 respectively, from ATMD. The service fee was charged for back office support for ATMD.

Transactions with Tomen Devices Corporation

On April 1, 2012, Tomen became a related party to the Company due to the establishment of ATMD, a joint venture with Tomen.

During the three months ended March 31, 2013 and 2012, we sold products for $0 and $28,240 respectively, to Tomen. As of March 31, 2013 and December 31, 2012, there were no outstanding accounts receivables from Tomen.

During the three months ended March 31, 2013 and 2012, we purchased inventories of $0 and $19,597,982 respectively, from Tomen. As of March 31, 2013 and December 31, 2012, there were $8,709,313 and $9,209,313 accounts payable respectively to Tomen.

During the three months ended March 31, 2013 and 2012, we paid $49,729 and $0 respectively, to Tomen as for interest on the accounts payable balance.