Quarterly report pursuant to Section 13 or 15(d)

Property And Equipment, Net

Property And Equipment, Net

9 Months Ended

Sep. 30, 2012

Property and equipment at September 30, 2012 and December 31, 2011 are as follows:

	2012		2011

Equipment & Installation	$	1,109,674	$	1,547,559
Office equipment		23,941		23,941
Computer equipment		11,985		11,985
Total Equipment		1,145,600		1,583,485

Less: accumulated depreciation		317,790		16,788
Property and equipment, net	$	827,810	$	1,566,697

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 nine months ended September 30, 2012 and September 30, 2011, depreciation expense charged to operations was $319,383 and $11,556, 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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