Annual report pursuant to Section 13 and 15(d)

Property and equipment, net

v3.10.0.1
Property and equipment, net
12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Property and equipment, net
5.
Property and equipment, net
 
Property and equipment, net, consisted of the following (in thousands):

 
 
Useful Life (Years)
 
December 31,
Asset Class
 
 
2018
 
2017
 
 
 
 
 
 
 
Operational equipment
 
3-10
 
$
15,926

 
$
15,457

Lab equipment
 
5
 
698

 
685

Computer equipment
 
3
 
201

 
174

Office furniture and equipment
 
3
 
336

 
326

Leasehold improvements
 
5-7
 

 
1,408

Land
 
 
1,047

 
1,047

Building
 
39
 
24,820

 
24,847

Asset retirement cost
 
20
 
670

 
670

Equipment under construction
 
 
 
7,892

 
4,552

 
 
 
 
51,590

 
49,166

Less:  accumulated depreciation
 
 
 
(6,042
)
 
(3,433
)
 
 
 
 
 
 
 
 
 
 
 
$
45,548

 
$
45,733



Depreciation expense was $3.2 million, $2.9 million and $0.7 million for the years ended December 31, 2018, 2017 and 2016, respectively. The building is a 136,750 square foot lead acid battery recycling plant being built 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 $0.5 million and $0.1 million for the years ended December 31, 2016 and 2015, respectively. Capitalization of interest ceased upon completion of the building in early November 2016.
 
The Company has financed certain of its lab equipment purchases through the use of capital leases. The lease terms are generally between 24 and 36 months with an option to purchase the asset at the end of the lease for $1. Total lab equipment included in the above table at December 31, 2018 subject to capital leases is $0.4 million less accumulated depreciation of $0.2 million resulting in net fixed assets under capital lease of $0.2 million. Total lab equipment included in the above table at December 31, 2017 subject to capital leases was $0.4 million less accumulated depreciation of $0.1 million resulted in net fixed assets under capital lease of $0.3 million. These assets are depreciated using the same useful lives as noted above and included in depreciation expense. See Note 12 – Notes Payable for minimum future payments related to these equipment leases.