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5. PROPERTY, PLANT AND EQUIPMENT UNDER CAPITAL LEASES, NET
 9 Months Ended
Sep. 30, 2014
Leases [Abstract]  
5. PROPERTY, PLANT AND EQUIPMENT UNDER CAPITAL LEASES, NET

Property, plant and equipment under capital leases, net consist of the following:

 

    September 30, 2014   December 31, 2013
At cost:            
Buildings   $ 133,757     $ 134,975  
Plant and machinery     2,514,240       2,537,133  
Total     2,647,997       2,672,108  
Less: Accumulated depreciation and amortization     (1,227,272 )     (970,780 )
Net book value   $ 1,420,725     $ 1,701,328  

 

The above buildings erected on parcels of land located in Shouguang, PRC, are collectively owned by local townships.  The Company has not been able to obtain property ownership certificates over these buildings as the Company could not obtain land use rights certificates on the underlying parcels of land.  

 

During the three-month period ended September 30, 2014 and 2013, depreciation and amortization expense totaled $88,352 and $88,194, respectively, which was recorded as cost of net revenue. During the nine-month period ended September 30, 2014 and 2013, depreciation and amortization expense totaled $265,601 and $262,500, respectively, which was recorded as cost of net revenue.