NOTES RECEIVABLE AND SALES-TYPE LEASE RECEIVABLE

9 Months Ended

Sep. 30, 2011

Notes Receivable and Sales Type Lease Receivable Disclosure [Abstract]

Notes Receivable and Sales Type Lease Receivable Disclosure [Text Block]

NOTE 7 — NOTES RECEIVABLE AND SALES-TYPE LEASE RECEIVABLE

Notes Receivable

Notes receivable of $330,000 and $250,000 at December 31, 2010 and September 30, 2011, respectively, relate to product financing arrangements that exceed one year and bear interest at approximately 8%. Interest is recognized over the life of the notes. The notes receivable are collateralized by the equipment being financed. Amounts collected on the notes receivable are included in net cash provided by operating activities in the condensed consolidated statements of cash flows. Unearned interest income is amortized to interest income over the life of the notes using the effective-interest method. The revenue derived from the sale of monitoring equipment and the related costs are deferred. Deferred revenue and cost are recognized over the service contract life, beginning at the time that a customer acknowledges acceptance of the equipment and service.

Notes receivable	$	250,000
Less: Current portion		35,000
Notes receivable - less current portion	$	215,000

Sales-type Lease Receivable

The present value of net investment in sales-type lease receivable of $862,000 and $3,195,000 at December 31, 2010 and September 30, 2011, respectively, is for principally five-year leases of the Company’s product including the Avis product pilot (see Notes 2 and 8 to the Unaudited Condensed Consolidated Financial Statements) and is reflected net of unearned income of $132,000 and $334,000 at December 31, 2010 and September 30, 2011, respectively, discounted at 4% – 14%.

Scheduled maturities of minimum lease payments outstanding as of September 30, 2011 are as follows:

Year ending December 31:
October - December 2011	$	176,000
2012		737,000
2013		776,000
2014		689,000
2015		515,000
Thereafter		302,000
		3,195,000
Less: Current portion		176,000
Sales-type lease receivable – less current portion	$	3,019,000