Property and Equipment

9 Months Ended

Sep. 30, 2012

Note 8: Property and Equipment


	(in thousands)
		September 30,	December 31,
		2012	2011

Land, buildings and improvements		$4,209	$ 4,209
Furniture, fixtures, and equipment		4,522	4,002
Leasehold improvements		85	85

Total property and equipment		8,816	8,296
Less: accumulated depreciation and amortization		(3,489)	(3,020)

Property and equipment, net		$5,327	$ 5,276

Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the respective assets, ranging from five to thirty-nine years.

The Board of Directors approved an allocation of up to $7.2 million, which included an increase of $700,000 authorized on June 5, 2012, for full engineering studies, capital improvements, system upgrades and introduction of building management systems to enhance production of Alferon®. The project has progressed to the construction phase. Construction in progress consists of accumulated costs for the construction and installation of capital improvements and process equipment within the Company's New Brunswick, New Jersey facility until the assets are placed into service. As of September 30, 2012, construction in progress was $5,785,000 as compared to $1,484,000 as of December 31, 2011. Due to the necessity to redirect many of our resources to the Ampligen® NDA application process and efforts towards the pre-approval inspection for Ampligen® manufacturing, the validation phase of the Alferon® manufacturing project has been delayed until the Company has completed its focus on the NDA process.

- 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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