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INVENTORIES

12 Months Ended

Dec. 31, 2012

INVENTORIES [Abstract]

NOTE 4 – INVENTORIES

Our inventories consist of the following at:

		December 31,
		2012				2011
Raw materials		$	66,719			$	81,303

Work-in-process			165				60,373

Provision for loss on project			-				-

Total inventory		$	66,884			$	141,676

Inventories include material, direct labor and related manufacturing administrative overhead and are stated at the lower-of-cost (determined on a weighted average basis) or market for raw materials and work-in-process inventory. When actual contract cost and the estimate to complete exceed the estimated contract revenues, a loss provision is recorded. Due to the nature of our inventory, we analyze inventory on an item-by-item basis compared to future usage and sales for obsolescence quarterly. As of December 31, 2012, management created an obsolescence reserve of approximately $15,000 based on this analysis. As of December 31, 2011, management did not believe an obsolescence reserve is necessary based on this analysis. Included in work-in-process inventory is an allocation of general and administrative cost of approximately $0 and $6,000 as of December 31, 2012, and December 31, 2011, respectively.

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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