Property, Plant, and Equipment, and Construction in Progress

9 Months Ended

Sep. 30, 2011

Property, Plant, and Equipment, and Construction in Progress

Property, Plant, and Equipment, and Construction in Progress

(4)Property, Plant, and Equipment, and Construction in Progress

On April 12, 2011, we entered into a Asset Purchase Agreement with MR&E Ltd. (“MR&E”) as an agent for a third party for the sale of the Company’s 700,000 pound per hour Circulating Fluidized Bed boiler island, (the “Boiler Island”), for $2.9 million.  The cash payments due from the third party were as follows: i) $100,000 upon the signing of the asset purchase agreement; ii) $300,000 on or before May 23, 2011; and iii) $2.5 million on or before July 9, 2011.  We received the first $100,000 payment upon the signing of the agreement.  However, the purchaser of the Boiler Island did not make the final two payments as described above and as a result, is in default of the Asset Purchase Agreement as of July 11, 2011.  We are considering our remedies against the purchaser. We also initiated a fresh process for selling the Boiler Island.

Impairment

We are required to test our GreenCert capitalized software development costs for recoverability at each reporting period.  Due to the unlikelihood that Green House Gas, (“GHC”), legislation will be passed in the United States in the near-term for energy-related companies, we believe there is uncertainty regarding our ability to generate revenue from the GreenCert Energy System and to recover our costs from the creation and sale of carbon credits.  As a result of this recoverability test, we impaired capitalized costs related to our GreenCert energy software module by $2.5 million during the nine months ended September 30, 2011, of which $2.4 million was previously reflected in construction in progress and $100,000 in property plant and equipment in our condensed consolidated balance sheet.

Additionally, during the nine months ended September 30, 2011, we recorded an impairment charge of $500,000 related to the write off of certain patents that were abandoned related to our K-Fuel technology and certain furniture and fixtures at our corporate location that are not being utilized.

During the three and nine months ended September 30, 2010, we tested our GreenCert agricultural capitalized software development costs for recoverability.  Due to the unlikelihood that GHG legislation will be passed in the United States in the foreseeable future that would establish a cap and trade market for Carbon off-sets, management believes that there is uncertainty as to whether we can generate revenue by selling carbon credits for the agricultural sector in the near future.  As a result of this recoverability test, we impaired capitalized costs related to our GreenCert agricultural software module by $3.5 million, of which $2.7 million was previously reflected in construction in progress and $735,000 in property plant and equipment in our condensed consolidated balance sheet.