2.4.0.8123 - Disclosure - COMMITMENTS AND CONTINGENCIEStruefalsefalse1false falsefalsefrom-2013-01-01-to-2013-06-30.431.0.0.0.0.0.0.0http://www.sec.gov/CIK0001485933duration2013-01-01T00:00:002013-06-30T00:00:001true 1us-gaap_CommitmentsAndContingenciesDisclosureAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0COMMITMENTS AND CONTINGENCIES [Abstract]2false 2us-gaap_CommitmentsAndContingenciesDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00<div> <div> 23. - COMMITMENTS AND CONTINGENCIES   Commitments   Leasing Arrangements   The Group has entered into commercial leases for offices and vehicles with a term expiring in April 2014. The lease may be cancelled by either party with 30-days prior written notice. Future minimum rental payments under this operating lease are as follows:   <table style="BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; WIDTH: 85%" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: center" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> <td style="FONT-WEIGHT: bold; TEXT-ALIGN: center" colspan="2" nowrap="nowrap">Office Rental</td> <td style="FONT-WEIGHT: bold" nowrap="nowrap"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td> </td> <td> </td> <td style="TEXT-ALIGN: center" colspan="2">(Unaudited)</td> <td> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 84%">Six months ending December 31, 2013</td> <td style="WIDTH: 2%"> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%">$</td> <td style="TEXT-ALIGN: right; WIDTH: 12%">269,184</td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td>Year ending December 31, 2014</td> <td> </td> <td style="TEXT-ALIGN: left"> </td> <td style="TEXT-ALIGN: right">434,971</td> <td style="TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt">Year ending December 31, 2015</td> <td style="PADDING-BOTTOM: 1pt"> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left">  </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> 181,714</td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt">Total</td> <td style="PADDING-BOTTOM: 2.5pt"> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> $</td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> 885,869</td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table>   Capital Commitment   <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0in"> </td> <td style="TEXT-ALIGN: left; WIDTH: 0.25in">1)</td> <td style="TEXT-ALIGN: justify">Construction of R&D center</td> </tr> </table>   We paid out phase payments of RMB66,050,000 (approximately $10.69 million) to the contractor for our new R&D center in Jinan during the year ended December 31, 2011. We expect to make further payments as the construction progresses, although the timing and amount of such payments have not been agreed with the contractor as of the date hereof. The building is estimated to be substantially completed by the end of 2014, and the overall budget for the construction is between $23 - $30 million.   <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0in"> </td> <td style="TEXT-ALIGN: left; WIDTH: 0.25in">2)</td> <td style="TEXT-ALIGN: justify">Guangzhou data center</td> </tr> </table>   On February 17, 2012, Trunkbow Shandong entered into a framework agreement with China Communications Services Corporation, Limited ("CCSC") for the construction, management and operation of a cloud data center in Guangzhou, China. Construction on the facility began in the second quarter, with the first phase scheduled for completion by the end of 2012. Under the agreement, Trunkbow will invest RMB72 million (approximately $11.6 million) in the project. Trunkbow invested $4.8 million as of June 30, 2013.   <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0in"> </td> <td style="TEXT-ALIGN: left; WIDTH: 0.25in">3)</td> <td style="TEXT-ALIGN: justify">Shanghai data center</td> </tr> </table>   On June 6, 2012, Trunkbow Shandong entered into a cooperation agreement with Shanghai Telecommunication Engineering Co., Ltd ("STE") for the construction, management and operation of a cloud data center to be located in Shanghai, China. Under the agreement, Trunkbow will invest RMB180 million (approximately $28 million). Trunkbow invested $1.6 million as of June 30, 2013.   <table style="MARGIN-BOTTOM: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-TOP: 0px" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify"> <td style="WIDTH: 0in"> </td> <td style="TEXT-ALIGN: left; WIDTH: 0.25in">4)</td> <td style="TEXT-ALIGN: justify">Huzhou data center</td> </tr> </table>   On October 10, 2012, Trunkbow Shandong entered into a framework agreement with Shanghai Telecommunication Engineering Co., Ltd ("STE") for the construction of a cloud data center in Huzhou, Zhejiang Province. Total construction cost is RMB130 million (approximately $21 million).   Contingencies   1) Lawsuit   On November 8, 2012, a putative class action lawsuit was filed by a purported Trunkbow shareholder in District Court, Clark County, Nevada, captioned Hansen v. Trunkbow, et al., Case No. A-12-671652-C. The complaint named as defendants several directors and officers of Trunkbow, namely, Wanchun Hou, Qiang Li, Jihong Bao, Xin Wang, Albert Liu, Regis Kwong, Kokhui Tan, Iris Geng, Tingjie Lv, Zhaoxing Huang and Dong Li (the "Individual Defendants"). Although Trunkbow was included among the defendants listed in the caption, the complaint did not assert a cause of action against the Company. The plaintiff in Hansen seeks recovery on behalf of all Trunkbow shareholders for alleged breaches of fiduciary duties by the Individual Defendants in connection with the Proposed Transaction in which the Chairman of Trunkbow's Board of Directors, Wanchun Hou, and Trunkbow's CEO, Qiang Li, have offered to acquire all of the outstanding shares of the Company's common stock not currently owned by them. On November 14, 2012, another putative class action lawsuit was filed by a purported Trunkbow shareholder in District Court, Clark County, Nevada, captioned Robert Davis v. Hou, et al., Case No. A-12-671946-C. Trunkbow is named as a defendant in this action, along with each of the Individual Defendants named in the Hanson complaint. The plaintiff in Davis seeks recovery on behalf of all Trunkbow shareholders for alleged breaches of fiduciary duties by the Individual Defendants in connection with the Proposed Transaction, and for aiding and abetting such alleged breaches by Trunkbow. The plaintiffs in both cases allege that the share price proposed by Hou and Li is inadequate in light of the Company's intrinsic value and anticipated future growth. Among other things, the plaintiffs in both actions seek to enjoin the Proposed Transaction until such time as the Individual Defendants have acted in accordance with their fiduciary duties. Only the Company has been served in the actions, but it need not respond to the complaints until after a transaction agreement has been signed, if that occurs, and an amended complaint has been filed.   2) Land use right   Trunkbow Shandong obtained the land use right on July 6, 2011. As of June 30, 2013, Trunkbow Shandong has made phase payments of $11.37 million on the construction materials but the construction work has not yet started as of August 19, 2013. According to the Decree No. 53 promulgated by Ministry of Land and Resources of the People's Republic of China, local governments have the right to rescind the land use right without compensation if the land is left idle for two years starting from the date the land is acquired. We expect to start the construction as soon as the rain season ends. The Group has not received any notification from the government that the land use right has been rescinded. This remains a possibility but not probable.     </div> </div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for commitments and contingencies.Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.25) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 460 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25496072&loc=d3e14435-108349 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308 false0COMMITMENTS AND CONTINGENCIESfalseCOMMITMENTS AND CONTINGENCIESUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.trunkbow.com/role/CommitmentsAndContingencies12