Annual report pursuant to Section 13 and 15(d)

Property and Equipment

Property and Equipment

12 Months Ended

Dec. 31, 2012

7.	Property and Equipment

The major classes of property and equipment are as follows:

	Useful Life	2012		2011
Production machinery and equipment	5 years	$	397,643	$	218,205
Other machinery and equipment, primarily computers and research equipment	3 - 5 years		581,409		399,587
Furniture and fixtures	7 years		439,716		416,005
Software	3 years		471,811		305,282
Leasehold improvements	Life of Lease¹		136,316		102,150
		$	2,026,895	$	1,441,229

¹ We amortize leasehold improvements over the life of the lease, which in all cases is shorter than the estimated useful life of the asset.

Property and equipment includes $30,000 and $20,000 of equipment under capital leases with accumulated amortization of $16,000 and $11,000 at December 31, 2012 and 2011, respectively. During 2012, 2011 and 2010, we recorded $199,000, $117,000 and $102,000, respectively, of depreciation and amortization related to property and equipment.

- 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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