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4. PREPAID LAND LEASE | 6 Months Ended
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Jun. 30, 2016
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 production facilities and warehouses of the Company are situated. The prepaid land lease is amortized on a straight line basis. During the three-month period ended June 30, 2016 and 2015, amortization of prepaid land leases totaled $123,717 and $127,583, respectively, which amounts were recorded as cost of net revenue. During the six-month period ended June 30, 2016 and 2015, amortization of prepaid land leases totaled $255,261 and $254,087, respectively, which amounts 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 the government authority. For parcels of land that are collectively owned by local townships, the Company cannot obtain land use rights certificates. The parcels of land that the Company cannot obtain land use rights certificates cover a total of approximately 59.43 square kilometers with an aggregate carrying value of $1,070,738 and approximately 59.43 square kilometers with an aggregate carrying value of $686,073 as at June 30, 2016 and December 31, 2015, respectively.

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