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SHORT-TERM DEBT

3 Months Ended

Mar. 31, 2013

NOTE2

SHORT-TERM DEBT

The Company has short term loans with two banks in Asia. The loans bear interest from 3.24% to 5.82% and are due in April and September of 2013. The Company has chosen not to use its excess cash to pay off these loans early since the interest rate is relatively low and they are due in the near future.

Note Payable, 10% interest per annum, maturing on 12/7/2013	$	77,000
Note Payable, 10% interest per annum, maturing on 12/20/2013		10,000
Note Payable, maturing on 4/29/2013		50,000
Short-term bank loans		316,807
Total Short-Term Debt	$	453,807

The holder of the $77,000 note is entitled to subscribe for a purchase 7,000 warrant shares at an exercise price of $1.50 per share. The holder of the $10,000 note is entitled to subscribe for a purchase 909 warrant shares at an exercise price of $1.50 per share. The holder of the 50,000 note was issued 50,000 warrant shares in lieu of interest on August 2, 2012.