Quarterly report pursuant to Section 13 or 15(d)

Property and equipment, net

Property and equipment, net

9 Months Ended

Sep. 30, 2017

Property, Plant and Equipment [Abstract]

5. Property and equipment, net

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

	Useful Life		September 30,			December 31,
Asset Class	(Years)		2017			2016

Operational equipment		3-10	$	15,773		$	15,132
Lab equipment		5		646			547
Computer equipment		3		175			140
Office furniture and equipment		5		321			298
Leasehold improvements		5-7		1,408			1,408
Land		—		1,047			1,047
Building		39		24,687			21,962
Asset Retirement Cost		20		670			—
Equipment under construction				3,672			1,635
				48,399			42,169
Less: accumulated depreciation				(2,914	)		(777	)

			$	45,485		$	41,392

Depreciation expense was $762,000 and $2,149,000 for the three and nine months ended September 30, 2017, respectively, and $205,000 and $403,000 for the three and nine months ended September 30, 2016, respectively. The building is a 136,750 square foot lead acid battery recycling plant located in McCarran, Nevada. Equipment under construction is primarily 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. Capitalization of interest ceased upon completion of the building in early November 2016.