FINANCING RECEIVABLES

12 Months Ended

Dec. 31, 2013

NOTE 6 - FINANCING RECEIVABLES

Financing receivables include notes and sales-type lease receivables from the sale of the Company’s products and services. Financing receivables consist of the following:

	December 31,
	2012		2013

Notes receivable	$	76,000	$	53,000
Sales-type lease receivable		13,881,000		14,253,000
Less: Allowance for uncollectable minimum lease payments		-		-
		13,957,000		14,306,000

Less: Current portion
Notes receivable		23,000		25,000
Sales-type lease receivable		3,120,000		4,026,000
		3,143,000		4,051,000

Notes and sales-type lease receivables - less current portion	$	10,814,000	$	10,255,000

Notes receivable relate to product financing arrangements that exceed one year and bear interest at approximately 8% - 10%. 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 Consolidated Statements of Cash Flows. Unearned interest income is amortized to interest income over the life of the notes using the effective-interest method. For the years ended December 31, 2012 and 2013, there were no sales of notes receivable.

The present value of net investment in sales-type lease receivable is principally for three to five-year leases of the Company’s product and is reflected net of unearned income of $1,362,000 and $1,169,000 at December 31, 2012 and 2013, respectively, discounted at 2% - 26%.

Scheduled maturities of minimum lease payments outstanding as of December 31, 2013 are as follows:

Year ending December 31:

2014	$	4,026,000
2015		3,797,000
2016		3,577,000
2017		2,336,000
2018		516,000
Thereafter		1,000

		14,253,000
Less: Current portion		4,026,000
Total	$	10,227,000