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COMMITMENTS AND CONTINGENCY
 12 Months Ended
Dec. 31, 2011
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
11.COMMITMENTS AND CONTINGENCY

 

Leases

 

The lease commitments are for office premises and a warehouse facility, all of which are classified as operating leases. These non-cancelable leases have lease terms expiring through December 2012 for one year. Approximate future minimum lease payments under these leases at December 31, 2011, are as follows:

 

Year Ending December 31, US$ 
2012  50,000 

 

Rent expense for the year ended December 31, 2011 and 2010 was $161,362 and $143,840, respectively.

 

Rent expense paid to the spouse of the Chief Executive Officer for the years ended December 31, 2011 and 2010 was nil and $10,047, respectively. The company and Chief Executive Officer agreed to terminate the lease agreement by April 30, 2010. The Company received an overpayment of rent of $1,591 from the Chief Executive Officer after the termination agreement was signed.

 

Employment Contracts

 

Under the PRC labor law, all employees have signed employment contracts with the Company. Management employees have employment contracts with terms up to three years and non-management employees have a one year employment contract renewable on an annual basis.

 

Contingency

 

The Labor Contract Law of the People’s Republic of China, requires employers to assure the liability of the severance payments if employees are terminated and have been working for the employers for at least two years prior to January 1, 2008. The Company has estimated its possible severance payments of approximately $235,000 and $188,000 as of December 31, 2011 and 2010, respectively, which have not been reflected in its consolidated financial statements, because it is more likely than not that this will not be paid or incurred.