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20. RESEARCH AND DEVELOPMENT EXPENSES | 12 Months Ended
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Dec. 31, 2012
Notes to Financial Statements |
20. RESEARCH AND DEVELOPMENT EXPENSES | NOTE 20 –RESEARCH AND DEVELOPMENT EXPENSES On September 6, 2007, SYCI and East China University of Science and Technology formally opened a Co-Op Research and Development Center. The research center is equipped with state of the art chemical engineering instruments for the purpose of pursuing targeted research and development of refined bromide compounds and end products. According to the Co-Op Research Agreement, any research achievement or patents will become assets of the Company. Originally, the Company will provide $500,000 annually until June 2012 to East China University of Science and Technology for research. On June 7, 2011, the Company and East China University of Science and Technology mutually agreed to terminate the Co-op Research Agreement due to the successful completion of the cooperative research and development tasks related to the development of bromine-related chemical products for the Company. Since the second quarter of 2010, SYCI conducted research for the new production line of wastewater treatment additives, the purpose of which is for the testing of the manufacturing routine and samples. The new production line was started operation and normal production in April 2011. However, the Company switched the aforesaid production line to the production of pharmaceutical and agricultural chemical intermediates in mid-June 2011 as the Company experienced some technological limitations on extraction purity, which lead to a lower than expected gross margin for wastewater treatment chemical additives. The total research and development expenses recognized in the income statements during the years ended December 31, 2012 and 2011 were $164,586 and $398,842, respectively, of which the consumption of bromine produced by the company amounted to $41,598 and $105,739, respectively.

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