Property and Equipment

12 Months Ended

Dec. 31, 2017

NOTE 7 – PROPERTY AND EQUIPMENT

At December 31, 2017 and 2016, property and equipment consisted of the following:

	Useful life	December 31, 2017			December 31, 2016
Office equipment and furniture	5 years	$	71,120		$	65,209
Manufacturing equipment	5 -10 years		34,419,653			32,240,010
Vehicles	5 years		253,564			169,773
Building and building improvements	5 - 20 years		22,556,026			21,135,718
Manufacturing equipment in progress	-		3,657,936			-
Construction in progress	-		1,652,859			-
			62,611,158			53,610,710
Less: accumulated depreciation			(29,430,039	)		(23,732,035	)
		$	33,181,119		$	29,878,675

For the years ended December 31, 2017 and 2016, depreciation expense amounted to $3,950,932 and $3,829,345, respectively, of which $2,849,988 and $3,311,410, respectively, was included in cost of revenues, and the remainder was included in operating expenses.

At December 31, 2017 and 2016, the Company conducted an impairment assessment on property and equipment based on the guidelines established in ASC Topic 360 to determine the estimated fair market value of property and equipment as of December 31, 2017 and 2016. Such analysis considered future use of such equipment, consultation with equipment resellers, and other industry factors. Upon completion of the 2017 and 2016 impairment analysis, the Company determined that the carrying value exceeded the fair market value on certain equipment formerly used in the Company’s forging and related components, and petroleum and chemical equipment segments, which have been accounted for as discontinued operations as of December 31, 2017 and 2016. Accordingly, in connection with the impairment of such equipment, the Company recorded impairment charges of $0 and $1,660,305 for the years at December 31, 2017 and 2016, respectively, which was included in loss from discontinued operations on the accompanying consolidated statements of operations and comprehensive loss.