Quarterly report pursuant to Section 13 or 15(d)

5. Property And Equipment, Net

5. Property And Equipment, Net

6 Months Ended

Jun. 30, 2014

Property and equipment at June 30, 2014 and December 31, 2013 are as follows:

	June 30, 2014		December 31, 2013

Equipment & Installation	$	717,918	$	717,918
Trucking equipment		63,082		-
Office equipment		23,941		23,941
Computer equipment		11,985		11,985
Total Equipment		816,926		753,844

Less: accumulated depreciation		680,268		580,772
Property and equipment, net	$	136,658	$	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 October 1, 2014 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 six months ended June 30, 2014 and 2013, respectively, depreciation expense charged to operations was $99,496 and $85,256.