Property and Equipment

6 Months Ended

Jun. 30, 2015

NOTE 4 – PROPERTY AND EQUIPMENT

At June 30, 2015 and December 31, 2014, property and equipment consisted of the following:

	Useful life	June 30, 2015			December 31, 2014
Office equipment and furniture	5 years	$	172,886		$	166,734
Manufacturing equipment	5 -10 years		77,498,325			76,870,025
Vehicles	5 years		207,393			205,714
Building and building improvements	5 - 20 years		26,296,532			26,083,624
			104,175,136			103,326,097
Less: accumulated depreciation			(38,133,408	)		(33,697,500	)
		$	66,041,728		$	69,628,597

For the three months ended June 30, 2015 and 2014, depreciation expense amounted to $2,070,007 and $2,119,516, respectively, of which $1,902,611 and $1,833,119, respectively, was included in cost of revenues, $0 and $167,987, respectively, which was related to the ESR equipment held for operating lease, was included in other income, and the remainder was included in operating expenses.

For the six months ended June 30, 2015 and 2014, depreciation expense amounted to $4,144,514 and $4,084,790, respectively, of which $3,632,422 and $3,688,534, respectively, was included in cost of revenues, $0 and $167,987 which was related to the ESR equipment held for operating lease, respectively, was included in other income, and the remainder was 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.