Quarterly report pursuant to Section 13 or 15(d)

Property and equipment, net

Property and equipment, net

6 Months Ended

Jun. 30, 2016

Property, Plant and Equipment [Abstract]

3. Property and equipment, net

Property and equipment, net, consisted of the following for the dates indicated (in thousands):

	Useful Life		June 30,			December 31,
Asset Class	(Years)		2016			2015

Operational equipment		3-10	$	9,989		$	356
Lab equipment		5		187			52
Computer equipment		3		107			72
Office furniture and equipment		5		132			9
Leasehold improvements		5-7		1,408			1,086
Land		-		1,047			1,047
Building under construction		25		13,835			5,681
Equipment under construction		10		1,683			4,390
				28,388			12,693
Less: accumulated depreciation				(288	)		(90	)
			$	28,100		$	12,603

Depreciation expense was $120,000 and $198,000 for the three and six months ended June 30, 2016, respectively and $18,000 and $23,000 for the three and six months ended June 30, 2015, respectively. Building under construction is the 136,750 square foot lead acid battery recycling plant being built in McCarran, Nevada. Equipment under construction is AquaRefining modules manufactured by the Company to be used in the McCarran, Nevada recycling plant.

Certain costs necessary to make the recycling facility ready for its intended use have been capitalized, including interest expense on notes payable. Capitalized interest totaled $152,000 and $303,000 for the three and six months ended June 30, 2016, respectively. There was no capitalized interest during the same periods during 2015.