Quarterly report pursuant to Section 13 or 15(d)

5. Property And Equipment, Net

5. Property And Equipment, Net

3 Months Ended

Mar. 31, 2014

Property and equipment at March 31, 2014 and December 31, 2013 are as follows:

	March 31,		December 31,
	2014		2013

Equipment & Installation	$	717,918	$	717,918
Office equipment		23,941		23,941
Computer equipment		11,985		11,985
Total Equipment		753,844		753,844

Less: accumulated depreciation		622,808		580,772
Property and equipment, net	$	131,036	$	173,072

The Company uses the straight-line method of depreciation over 3 to 5 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 2012 the Company recorded an impairment charges totaling $800,000 against the value of the equipment. During the quarters ended March 31, 2014 and 2013, respectively, depreciation expense charged to operations was $42,036 and $42,628.