INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2014

INTANGIBLE ASSETS, NET [Text Block]

NOTE 7 INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

		June 30, 2014			December 31, 2013
Computer software, cost	$	1,614		$	1,629
Exclusive right to use a secret process, cost		4,877,787			4,922,509
Less: Accumulated amortization		(4,025,592	)		(3,816,401	)
	$	853,809		$	1,107,737

In April 2006, the Company purchased from a third party a ten-year exclusive right to use a secret process and method in the cultivation and growing of Cordyceps Militaris, which is widely used for traditional Chinese medicine, for a cash consideration of RMB30,000,000, payable over five years. The exclusive right is amortized over its term of ten years using the straight-line method.

Amortization expense was $244,427 and $240,445 for the six months ended June 30, 2014 and 2013, respectively, and $121,802 and $121,354 for the three months ended June 30,2014 and 2013 respectively. The estimated expense of the intangible assets over each of the next three years will be:

Remainder of fiscal 2014	$	243,958
Fiscal 2015		487,822
Fiscal 2016		122,029
	$	853,809