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COMMITMENTS AND CONTINGENCY
 6 Months Ended
Jun. 30, 2012
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
10. 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 June 30, 2012, are $50,000 for the twelve months ending June 30, 2013.

 

Rent expense for the six and three months ended June 30, 2012 and 2011 was $43,467, $72,155, $21,989 and $54,876, respectively.

 

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 $270,000 and $235,000 as of June 30, 2012 and December 31, 2011, respectively, which have not been reflected in its condensed consolidated financial statements, because it is more likely than not that this will not be paid or incurred.