9. INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2014

Intangible Assets Disclosure [Text Block]

9. INTANGIBLE ASSETS

Intangible assets consisted of land use right and patents. All land in the PRC is government-owned and cannot be sold to any individual or company. However, the government grants the user a “land use right” to use the land. The Company has the right to use the land for 50 years and amortizes the right on a straight-line basis over 50 years.

The Company was granted an exclusive license to use a production method patent until December 31, 2016, for lead-free soft solder with mischmetal from the Shenyang Industry University. The Company paid a one-time use of technology fee of RMB 100,000 ($15,887).

Intangible assets as of March 31, 2014 and December 31, 2013 were as follows:

	2014			2013
Land use right	$	4,567,757		$	4,634,762
Patents		16,255			16,401
Total		4,584,012			4,651,163
Accumulated amortization		(482,476	)		(489,105	)
Total, net	$	4,101,536		$	4,162,058

Amortization of intangible assets for the three months ended March 31, 2014 and 2013 was $23,307 and $15,292, respectively. At March 31, 2014, annual amortization for the next five years was expected to be as follows:

Year	Amount
2015	$	93,286
2016		93,286
2017		93,286
2018		93,286
2019		93,286
Thereafter		3,635,106
Total	$	4,101,536

As of March 31, 2014 and December 31, 2013, the Company is in the process of acquiring a land use right in the Liaoning Province Tieling Economic and Technological Development Zone for which a land use right deposit of $0.4 million was made to Tieling Yinzhou Industrial Park Management Committee and Teiling Economic Development Zone Non-Tax Revenue Bureau. The deposit of the land use right was transferred into intangible assets during the first quarter of 2012; however, the Company has not obtained the land use right as of this report date.