Annual report pursuant to Section 13 and 15(d)

Capital Lease Obligations

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Capital Lease Obligations
12 Months Ended
Dec. 31, 2012
Capital Lease Obligations [Abstract]  
Capital Lease Obligations
Note 5 – Capital lease obligations
 
The Company acquired capital leases in the acquisition of SafeData. The economic substance of the leases is that the Company is financing the acquisitions through the leases and accordingly, they are recorded in the Company’s assets and liabilities. The leases are payable to Systems Trading, Inc. and IBM with combined monthly installments of $56,136 through various dates in 2012 and 2011. The leases are secured with the computer equipment.  Interest rates on capitalized leases vary from 6%-12% and are imputed based on the lower of the Company’s incremental borrowing rate at the inception of each lease or the lessor’s implicit rate of return.
 
Future minimum lease payments under the capital leases are as follows:
 
       
    As of December 31, 2012
 
$
1,162,453
 
    Less amount representing interest
   
(64,786
)
    Total obligations under capital leases
   
1,097,667
 
    Less current portion of obligations under capital leases
   
(715,095
)
    Long-term obligations under capital leases
 
$
382,572
 
 
Long-term obligations under capital leases at December 31, 2012 mature as follows:
 
       
For the year ending December 31, 2013
 
$
715,095
 
           2014
   
329,700
 
           2015
   
52,872
 
        
       
         
   
$
1,097,667
 
  
The assets held under the capital leases are included in property and equipment as follows:
 
       
Equipment
 
$
1,571,784
 
Less: accumulated depreciation
   
510,151
 
         
   
$
1,061,633