Property, Plant And Equipment - Net

9 Months Ended

Sep. 30, 2011

Property, Plant And Equipment - Net [Abstract]

Property, Plant And Equipment - Net

6. PROPERTY, PLANT AND EQUIPMENT — NET

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

	September 30, 2011			December 31, 2010
Plant equipment	$	4,148		$	1,948
Lab equipment		3,072			2,559
Leasehold improvements		1,237			432
Computer equipment and software		1,214			450
Building		975			—
Furniture and fixtures		297			153
Land		197			—
Automobiles		49			49
Construction in progress		13,348			1,184
		24,537			6,775
Less accumulated depreciation and amortization		(2,218	)		(1,082	)
Property, plant and equipment — net	$	22,319		$	5,693

Construction in progress related primarily to the Peoria manufacturing facility and plant equipment not yet placed in service as of September 30, 2011 and plant equipment not yet placed in service as of December 31, 2010.

Depreciation and amortization expense was $0.4 million and $0.2 million for the three months ended September 30, 2011 and 2010, respectively. Depreciation and amortization expense was $1.1 million and $0.6 million for the nine months ended September 30, 2011 and 2010, respectively.

In March 2011, the Company entered into an agreement to purchase a development and commercial production facility with multiple 128,000-liter fermenters, and an annual oil production capacity of over 2,000,000 liters (1,820 metric tons) located in Peoria, Illinois for $11.5 million. This transaction closed in May 2011, and the Company paid for the aggregate purchase price with available cash and borrowed $5.5 million under a promissory note, mortgage and security agreement from the seller. The Company anticipates it will begin operating the existing fermentation capacity of the facility in the second half of 2011 and expects to begin integrated production of microbial oil in the first half of 2012. The principal of the promissory note is payable in two lump sum payments, the first on March 1, 2012 and the second on March 1, 2013. The note is interest-free and secured by the real and personal property acquired from the seller. The assets acquired and the related note payable were recorded based upon the present value of the future payments assuming an imputed interest rate of 3.25%, resulting in a discount of $0.3 million. The $0.3 million loan discount is being recognized as interest expense over the loan term utilizing the effective interest method. A valuation analysis was performed to determine the fair value the assets, and the total cost was assigned to individual assets based on their relative fair values in accordance with ASC 360-10.