Annual report pursuant to Section 13 and 15(d)

Property And Equipment

Property And Equipment

12 Months Ended

Dec. 31, 2011

Property and equipment at December 31, 2011 and 2010 are as follows:

	2011		2010
Equipment & Installation	$	1,547,559	$	1,312
Office equipment		23,941		-
Computer equipment		11,985		479
Total Equipment		1,583,485		1,791

Less: accumulated depreciation		16,788		45
Property and equipment, net	$	1,566,697	$	1,746

As part of the reverse merger, the Company acquired office equipment with a fair value of $5,706. The Company uses the straight-line method of depreciation over 3 to 10 years. During the year ended December 31, 2011, the Company installed equipment with a total cost of $1,499,080 at the site of its first commercial customer in Centralia, Washington. This equipment is subject to a bargain purchase option on January 1st, 2015 and the Company also bears the cost of asset retirement at the end of the commercial contract should the customer not exercise the purchase option. The Company believes that if required to retire, the scrap value of the equipment would offset the cost of removal. During the years ended December 31, 2011 and 2010, depreciation expense charged to operations was $16,743 and $45, respectively.

- 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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