()

Finished goods represent inventory the Company procured for resale and revenue will be recognized at a point in time when the performance obligation has been satisfied and control of the finished goods has transferred to the customer.

(a)

Included within machinery and equipment were assets under capital leases with costs of and and associated accumulated depreciation of  and  as of and respectively. The related depreciation expense for the months ended and was  and respectively.

(b)

 

 

 

In accordance with ASC - the Company is required to evaluate for impairment when events or changes in circumstances indicate that the carrying value of such assets be recoverable. Upon the occurrence of a triggering event, the Company assesses whether the estimated undiscounted cash flows expected from the use of the asset and the residual value from the ultimate disposal of the asset exceeds the carrying value. As at the Company identified that operating results for its China segment asset group did meet forecasted results, which was considered a triggering event related to its China segment asset group. The net carrying amount of the China asset group is The Company estimated undiscounted cash flows and determined a recoverable amount of  in excess of the net carrying value, therefore impairment loss was recorded in The key assumptions included in these cash flows are projected revenue based on management’s forecast and corresponding margins. The estimate of undiscounted cash flows are sensitive to these key assumptions, for instance, if our revenue projections are lower by the recoverable amount in excess of the carrying amount would be reduced to  As such, the Company continues to monitor for impairment triggers each quarter, which result in future impairments in this asset group.