PROPERTY HELD FOR SALE

6 Months Ended

Jun. 30, 2012

PROPERTY HELD FOR SALE [Abstract]

PROPERTY HELD FOR SALE

4. PROPERTY HELD FOR SALE

Our property held for sale consists of the following:

	June 30, 2012			December 31, 2011
Land - held for sale	$	410,728		$	-
Buildings and improvements, leasehold improvements - net held for sale		1,684,076			-
Total		2,094,804			-
Less estimated impairment		(708,000	)		-
Net property held for sale	$	1,386,804		$	-

In July 2012, we entered into an agreement to sell our principal office, manufacturing, storage, and primary research and development facility in Tucson, Arizona for approximately $1.4 million. In the quarter ended June 30, 2012, we recognized a $708,000 impairment charge as we do not expect to recover the carrying amount of these assets. The fair value used in the calculation of the impairment charge was based on the purchase price contained in the building purchase agreement. The building represents a sizable asset which is much larger than that required to support our present operations. It is expected that this sale will be completed prior to the end of September 2012 and will provide us with additional operating capital. We have entered into agreements to lease facilities consistent with the present level of activity. These facilities will provide adequate space for our commercial applications centers, fabrication of laser and high voltage systems and performance of development activities and testing as contained within the outstanding proposals to the Government, and will provide us secure storage for company assets and Government equipment.