Property and Equipment

12 Months Ended

Dec. 31, 2012

NOTE 4 - PROPERTY AND EQUIPMENT

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

	Useful Life		December 31, 2012			December 31, 2011

Office equipment and furniture	5 Years		$	222,853		$	215,145
	5 – 10
Manufacturing equipment	5 – 10 Years			56,916,700			57,347,726
Vehicles	5 Years			125,167			124,211
Construction in progress		-		28,785			330,730
Building and building improvements	20 Years			20,785,597			20,623,919
				78,079,102			78,641,731
Less: accumulated depreciation				(18,643,002	)		(14,599,652	)

			$	59,436,100		$	64,042,079

For the years ended December 31, 2012 and 2011, depreciation expense amounted to $6,519,394 and $5,351,359, respectively, of which $4,983,679 and $4,238,590, respectively, is included in cost of revenues and the remainder is included in operating 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.

In 2011, the Company entered into a non-cancelable capital lease agreement with expiration date of June 3, 2014. Accordingly, the asset related to the capital lease in the amount of $785,583 and $791,628, respectively, is included in the accompanying consolidated balance sheets in property and equipment as of December 31, 2012 and 2011. For the years ended December 31, 2012 and 2011, the depreciation expense related to the capital lease in the amount of $71,204 and $0, respectively, is included in cost of revenues.

- 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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