NOTE 5 - REVENUE RECOGNITION

The Company’s revenue is derived from: (i) sales of our industrial and rental fleet wireless asset management systems and services, which includes training and technical support; (ii) sales of our transportation asset management systems and spare parts sold to customers (for which title transfers on the date of customer receipt) and from the related communication services under contracts that generally provide for service over periods ranging from one to five years; (iii) post-contract maintenance and support agreements; and (iv) periodically, from leasing arrangements. Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue, and classified as short-term or long-term based upon the terms of future services to be delivered.

Deferred revenue consists of the following:

	December 31,
	2012		2013

Deferred activation fees	$	469,000	$	496,000
Deferred industrial equipment installation revenue		291,000		258,000
Deferred maintenance revenue		1,478,000		1,959,000
Deferred remote asset management product revenue		8,320,000		8,466,000

		10,558,000		11,179,000
Less: Current portion		4,689,000		4,641,000

Deferred revenue - less current portion	$	5,869,000	$	6,538,000

During the years ended December 31, 2012 and 2013, the Company amortized deferred equipment revenue of $3,380,000 and $3,169,000, respectively , to product revenue.