Property and Equipment

9 Months Ended

Sep. 30, 2012

NOTE 4 - PROPERTY AND EQUIPMENT

At September 30, 2012 and December 31, 2011, property and equipment consisted of the following:

	Useful Life		September 30, 2012			December 31, 2011
Office equipment and furniture	5 Years		$	220,447		$	215,145
Manufacturing equipment	5 – 10 Years			64,252,326			57,347,726
Vehicles	5 Years			124,813			124,211
Construction in progress		-		26,679			330,730
Building and building improvements	20 Years			20,726,857			20,623,919
				85,351,122			78,641,731
Less: accumulated depreciation				(19,385,303	)		(14,599,652	)
			$	65,965,819		$	64,042,079

For the nine months ended September 30, 2012 and 2011, depreciation expense amounted to $4,719,769 and $3,651,168, respectively, of which $3,597,337 and $3,145,842, respectively, is included in inventory and cost of revenues and the remainder is included in general and administrative expenses. For the three months ended September 30, 2012 and 2011, depreciation expense amounted to $1,627,258 and $1,147,409, respectively, of which $1,253,362 and $1,062,878, respectively, is included in inventory and cost of revenues and the remainder is included in general and administrative expenses. Depreciation is not taken during the period of construction or equipment installation. Upon completion of the installation of manufacturing equipment or any construction in progress, construction in progress balances will be classified to their respective property and equipment category.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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