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5. PROPERTY, PLANT AND EQUIPMENT UNDER CAPITAL LEASES, NET

9 Months Ended

Sep. 30, 2017

5. PROPERTY, PLANT AND EQUIPMENT UNDER CAPITAL LEASES, NET

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

	September 30, 2017			December 31, 2016
At cost:
Buildings	$	123,988		$	118,623
Plant and machinery		2,330,629			2,229,775
Total		2,454,617			2,348,398
Less: Accumulated depreciation and amortization		(2,108,912	)		(1,794,141	)
Net book value	$	345,705		$	554,257

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, 2017 and 2016, depreciation and amortization expense totaled $77,527 and $81,618, respectively, which was recorded as cost of net revenue. During the nine-month period ended September 30, 2017 and 2016, depreciation and amortization expense totaled $227,998 and $248,226, respectively, which was recorded as cost of net revenue.