NOTE 4 — FIXED ASSETS:

Fixed assets consist of the following at:

	December 31, 2012			December 31, 2011
Machinery and equipment	$	2,439,596		$	1,982,926
Furniture and fixtures		287,412			221,299
Computer and telephone equipment		151,737			460,842
Leasehold improvements		798,049			595,492
Automobiles		29,228			29,228
		3,706,022			3,289,787
Less accumulated depreciation and amortization		(2,278,376	)		(2,227,511	)
	$	1,427,646		$	1,062,276

There were no capital leases at the end of December 31, 2012. Included in fixed assets is $24,000, net of accumulated depreciation of assets held under capital leases as of December 31, 2011. Fixed assets at December 31, 2012 also include $323,000 in equipment, which has been delivered and set-up but is undergoing validation and as such is currently not being depreciated. Depreciation expense for the 2012 and 2011 years aggregated $423,000 and $338,000, respectively.

As of December 31, 2012 and 2011, the Company had paid deposits on various pieces of equipment aggregating $223,584 and $139,790, respectively. The Company is further committed to an additional obligation of $61,071 as various milestones are achieved by the various vendors.