Quarterly report pursuant to Section 13 or 15(d)

Property and equipment, net

Property and equipment, net

9 Months Ended

Sep. 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	September 30,			December 31,
Asset Class	(Years)	2016			2015

Operational equipment	3-10	$	13,487		$	356
Lab equipment	5		340			52
Computer equipment	3		126			72
Office furniture and equipment	5		284			9
Leasehold improvements	5-7		1,408			1,086
Land	-		1,047			1,047
Building under construction	39		18,305			5,681
Equipment under construction	10		1,552			4,390
			36,549			12,693
Less: accumulated depreciation			(493	)		(90	)

		$	36,056		$	12,603

Depreciation expense was $205,000 and $403,000 for the three and nine months ended September 30, 2016, respectively, and $31,000 and $54,000 for the three and nine months ended September 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 $153,000 and $456,000 for the three and nine months ended September 30, 2016, respectively, and is included in Building under construction above. There was no capitalized interest during the same periods in 2015.