5. Property and Equipment

Fortress’ property and equipment consisted of the following:

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Fortress’ depreciation expense for the years ended December 31, 2024 and 2023 was $1.0 million and $2.2 million, respectively, and was recorded in research and development, and selling, general and administrative expense in the Consolidated Statements of Operations.

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Impairment of Long-Lived Assets

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During the year ended December 31, 2024, Mustang concluded it had a triggering event requiring assessment of impairment for certain leasehold improvements and the related right-of-use asset. Mustang assessed the carrying value of the asset group consisting of the leasehold improvements and right-of-use asset in accordance with ASC 360, given the significant changes to Mustang’s operations, operating cash and the repurchase of equipment. The assessment of the recoverability of the asset group concluded that there was impairment on the carrying value of the asset group of approximately $2.6 million, which was allocated on a pro rata basis using the relative carrying amounts of the assets. Approximately $2.2 million of the impairment loss was allocated to leasehold improvements, with the remaining $0.4 million allocated to the right-of-use asset. At December 31, 2024, Mustang assessed the remaining improvements, right-of-use asset, and property, plant and equipment held for sale for impairment and concluded that the property, plant and equipment held for sale were impaired, based primarily on offers received from third parties.  As such, Mustang recorded an additional impairment charge of $1.0 million for the property, plant and equipment held for sale. See Note 8 for asset impairment of $3.1 million recognized in the year ended December 31, 2023.