Acquisition

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note 14. Acquisition

On September 28, 2012, the Company completed its acquisition of 100% equity interest of Jussey Investments Limited (“Jussey”), a company incorporated in British Virgin Islands, for aggregate purchase consideration of approximately US$2,150,000, payable by way of cash or equivalent in favor to the seller within 5 business days after the completion of the acquisition. Jussey owns 100% equity interest in eVision Telecom Limited (“eVision”), a Hong Kong incorporated company, and 80% equity interest in USmart Electronic Products Limited (“UEP”), a Hong Kong incorporated company. Jussey indirectly owns 80% of Dongguan Kezheng Electronics Limited (“Kezheng”), a wholly foreign-owned enterprise (“WFOE”) organized under the laws of the PRC by UEP.

Through the acquisition, the Company has diversified its product portfolio, enhanced its distributor role to a Research and Develop (“R&D”) manufacturer with its own products and brands, entered the telecommunication industry, gained access to the 3G baseband licenses, and design and manufacturing matrix and facility.

The Company accounted for this acquisition of Jussey and its subsidiaries by acquisition method of accounting. The balance sheet items were stated at fair value. The fair value was accounted upon the issuance of fair value report from an independent valuator engaged for this acquisition.

The purchase price was allocated as follows:

Purchase Consideration:
Acquisition obligation payable to sellers	$	2,150,000
Direct costs relating to acquiree		20,000
Less: cash acquired		(157,259	)
Net purchase consideration	$	2,012,741
Assets Acquired
Net tangible assets acquired:
Fixed assets	$	355,481
Inventories		654,757
Trade receivables, deposits, prepayment and other receivables		717,369
Restricted cash		132,706
Trade payables, other creditors and accruals		(13,328,971	)
Non-controlled interest		2,140,276
Net tangible assets acquired	$	(9,328,382	)
Purchase consideration in excess of net tangible assets	$	11,341,123
Allocated to:
Trademark	$	53,955
License contracts		11,287,168
	$	11,341,123

The purchase price allocation was computed based on fair value report from the independent valuator.

Jussey’s results of operations are consolidated with the Company effective October 1, 2012.