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Deferred government grant

12 Months Ended

Dec. 31, 2017

16.

Deferred government grant

Deferred government grants as of September 30, 2016, December 31, 2016 and 2017 consist of the following:

		September 30,			December 31,			December 31,
		2016			2016			2017
Total government grants	$	4,928,830		$	4,699,261		$	4,864,131
Less: Current		(197,645	)		(142,400	)		(152,003	)
	$	4,731,185		$	4,556,861		$	4,712,128

In September 2013, the Management Committee of Dalian Economic Zone Management Committee (the “Management Committee”) provided a subsidy of RMB150 million to finance the costs incurred in moving our facilities to Dalian, including the loss of sales while the new facilities were being constructed. For the year ended September 30, 2015, the Company recognized $23,103,427 as income after offset of the related removal expenditures of $1,004,027. No such income or offset was recognized in year ended September 30, 2016, three months ended December 31, 2016 and year ended December 31, 2017.

On October 17, 2014, the Company received a subsidy of RMB46.2 million (approximately $7.1 million) pursuant to an agreement with the Management Committee dated July 2, 2013 for costs of land use rights and to be used to construct the new manufacturing site in Dalian. Part of the facilities had been completed and was operated in July 2015 and the Company has initiated amortization on a straight-line basis over the estimated useful lives of the depreciable facilities constructed thereon.

The Company offset government grants of $201,847, $36,183 and $146,311 for the year ended September 30, 2016, three months ended December 31, 2016 and year ended December 31, 2017, respectively, against depreciation expenses of the Dalian facilities.