Quarterly report pursuant to sections 13 or 15(d)

Related Party Transactions

v2.4.0.6
Related Party Transactions
9 Months Ended
Sep. 30, 2012
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]

Note 6 — Related Party Transactions

 

The Company entered into an unsecured promissory note with an officer of the Company in an aggregate principal amount of $200,000. The note did not bear interest and was payable upon the completion of the Offering. $19,900 of interest was imputed on the note at 7% and charged to additional paid-in capital. The discount was amortized to interest expense on a monthly basis. Interest expense for the nine months ended September 30, 2012 and 2011 and the period from January 18, 2010 (inception) to September 30, 2012 was $0, $7,739 and $19,900, respectively. The loan was repaid in full in June 2011 with proceeds from the Offering. On September 29, 2012, the Company entered into a new unsecured promissory note with an officer of the Company in an aggregate principal amount of $75,137. The note doesn’t bear interest and will be payable upon the closing of the business combination.

 

The Company has agreed to pay Chum Capital Group Limited (“Chum”) a total of $10,000 per month for office space, utilities, secretarial and general and administrative services for a period commencing June 2, 2011 and ending on the earlier of the consummation by the Company of an initial Business Combination or the Company’s liquidation. Chum Capital Group Limited is an affiliate of Xuesong Song, Jin Shi and Michael W. Zhang, the Company’s executives. Total expenses related to office space, utilities, secretarial and general and administrative services for the three months ended September 30, 2012 and 2011 were $30,000 and $30,000, respectively. Total expenses for the nine months ended September 30, 2012 and 2011 and the period from January 18, 2010 (inception) to September 30, 2012 were $90,000, $40,000 and $160,000, respectively.

 

On October 15, 2011, the Company’s Board of Directors authorized it to advance up to $390,000 to Chum in order to reduce potential losses incurred by Chinese currency appreciation against the U.S. dollar. The advance will be used to fund the operating expenses of the Company. Total expenses paid by Chum on behalf of the Company for the three months ended September 30, 2012 and 2011 were $230,144 and $0, respectively. For the nine months ended September 30, 2012 and 2011 and the period from January 18, 2010 (inception) to September 30, 2012, Chum paid $381,740, $0 and $381,740 in expenses on behalf of the Company. Foreign exchange losses recognized for the three months ended September 30, 2012 and 2011 were $354 and $0, respectively. For the nine months ended September 30, 2012 and 2011 and the period from January 18, 2010 (inception) to September 30, 2012, the Company recognized a foreign exchange losses of $1,090, $0, and $458 on the advance which is recorded in other income on the condensed statement of operations. As of September 30, 2012 and December 31, 2011, the Company had a receivable of $0 and $ 382,830 from Chum, respectively. As of September 30, 2012, the receivable from Chum has been used up.