Property, plant and equipment

6 Months Ended

Jun. 30, 2013

(4) Property, plant and equipment

Property, plant and equipment are stated at fair value as of the date of the acquisition of TLC or cost and are depreciated using a straight-line method over the estimated useful lives of the assets. The Company assigns each fixed asset a useful life ranging from 5 to 31 years for buildings and improvements and 3 to 10 years for equipment. Repair and maintenance costs are expensed as incurred. Depreciation expense was $525,660 and $765,237 for three and six months ended June 30, 2013, respectively, and $0 for the three and six months ended June 30, 2012.

Certain property acquired in the TLC acquisition is not likely to be utilized for operations by either TLC or other direct selling operations and are being actively marketed by the Company and were recorded at fair value upon acquisition. Management will continue to evaluate other TLC assets within property, plant and equipment to determine if the Company will be able to meet the one-year requirement to complete the sale of assets. The Company has not classified these assets as held for sale within current assets due to the uncertainty of the amount of time required to complete the asset sales. As such, the Company will continue to report the assets within property, plant and equipment until management believes we will be able to meet the one-year requirement to complete the sale of assets as defined under ASC 360-10-45.

Property, plant and equipment consisted of the following:

	June 30, 2013		December 31, 2012
Land and improvements	$	5,327,862	$	—
Buildings and improvements	22,008,583		—
Equipment	1,121,863		34,562
Construction in progress	56,111		—
	28,514,419		34,562
Less accumulated depreciation	808,752		33,048
	$	27,705,667	$	1,514

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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