STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2011

STOCKHOLDERS' EQUITY

NOTE 14 – STOCKHOLDERS’ EQUITY

Common Stock

On July 1, 2009, the Company entered into a two year consulting agreement with FirsTrust Group, Inc. for business development and capital markets advisory services. In connection with this agreement, the Company issued 1,800,000 (pre-Reverse Stock Split, see Note 18) shares of common stock valued at $0.09 per share to FirsTrust Group, Inc. and recorded $162,000 as deferred compensation. This agreement has a penalty to FirsTrust Group, Inc. for non-compliance with its terms. The stock-based compensation expense was fully expensed in June 2011.

On August 1, 2009, the Company entered into a two year agreement with Shanghai Hai Mai Law Firm for legal services. In connection with this agreement, the Company issued 2,350,000 (pre-Reverse Stock Split, see Note 18) shares of common stock valued at $0.10 per share to Shanghai Hai Mai Law Firm and recorded $235,000 as deferred compensation. This agreement has a penalty to Shanghai Hai Mai Law Firm for non-compliance with its terms. The stock-based compensation expense was fully expensed in July 2011.

On May 25, 2011, the Company issued 8,000,000 (pre-Reverse Stock Split, see Note 18) shares of common stock to two directors and two employees under the Company’s 2005 Equity Compensation Plan, as amended, for services they provided to the Company. The stock was valued at stock issuance date at $0.05 per share, and $400,000 was recorded as stock based compensation.