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4. PREPAID LAND LEASE | 3 Months Ended
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Mar. 31, 2015
Notes to Financial Statements |
4. PREPAID LAND LEASE | The Company prepaid for land leases with lease terms for periods ranging from one to fifty years to use the land on which the office premises, production facilities and warehouses of the Company are situated. The prepaid land lease is amortized on a straight line basis. During the three-month periods ended March 31, 2015 and 2014, amortization of prepaid land lease totaled $126,503 and $104,972, respectively, which were recorded as cost of net revenue. The Company has the rights to use certain parcels of land located in Shouguang, the PRC, through lease agreements signed with local townships or government authority. For parcels of land that are collectively owned by local townships, the Company could not obtain land use rights certificates. The parcels of land of which the Company could not obtain land use rights certificates covers a total of approximately 59.43 square kilometers of aggregate carrying value of $962,149 and approximately 59.39 square kilometers of aggregate carrying value of $742,820 as at March 31, 2015 and December 31, 2014, respectively.

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