Land Use Rights

6 Months Ended

Jun. 30, 2011

6. Land Use Rights

	June 30, 2011			December 31, 2010

Original cost	$	1,332,000		$	1,302,024
Deposit paid for acquisition of land use rights		1,114,034			-

		2,446,034			1,302,024
Less: Accumulated amortization		(203,209	)		(185,808	)

	$	2,242,825		$	1,116,216

The original cost of land use rights cost was acquired by the Company in the PRC in 2004 to construct its main operating and production facilities and they expire in 2054.

During the quarter ended June 30, 2011, the Company entered into an agreement with the County Government of Nanya, Jain for $3.7 million to acquire the rights to use a piece of land. As of June 30, 2011, the Company paid an initial deposit of $1.1 million and the balance of $2.6 million will be paid when certain conditions pertaining to delivery of the land are completed.

General

Land Use Rights are generally associated with the long-term use of land underlying a building or production facility in the PRC. These rights have characteristics similar to a real estate property deed under western law in that they are:

1.	paid for at initial acquisition
2.	have an extended life, up to 50 years

3.	generally relate to a building or production facility

4.	may be pledged as collateral for debt
5.	require no further payments by the owner unless the land usage or building configuration is modified

They differ from a real estate property deed in that:

1.		the transfer of use rights is not permanent
2.	and therefore they are amortized over their life.

ONE Bio, Corp. 10-Q