NOTE 9 - FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation and amortization, and at December 31, 2012 and 2013, are summarized as follows:

	December 31,
	2012		2013

Equipment	$	1,213,000	$	1,375,000
Computer software		3,303,000		3,319,000
Computer hardware		1,901,000		2,565,000
Furniture and fixtures		370,000		371,000
Automobiles		47,000		47,000
Leasehold improvements		181,000		181,000

		7,015,000		7,858,000
Accumulated depreciation and amortization		(4,614,000)		(5,619,000)

	$	2,401,000	$	2,239,000

The Company had expenditures of approximately $480,000 , including $305,000 under a capital lease, for computer equipment which had not been placed in service as of December 31, 2013. Depreciation expense is not recorded for such assets until they are placed in service.

Depreciation and amortization expense for the years ended December 31, 2011, 2012 and 2013 was $1,195,000, $1,017,000 and $1,005,000, respectively. This includes amortization of costs associated with computer software and website development for the years ended December 31, 2011, 2012 and 2013 of $623,000, $576,000 and $566,000, respectively.

The Company capitalizes in fixed assets the costs of software development and website development. Specifically, the assets comprise an implementation of Oracle Enterprise Resource Planning (ERP) software, enhancements to the VeriWise^TM systems, and a customer interface website (which is the primary tool used to provide data to our customers). The website employs updated web architecture and improved functionality and features, including, but not limited to, customization at the customer level, enhanced security features, custom virtual electronic geofencing of landmarks, global positioning system (“GPS”)-based remote mileage reporting, and richer mapping capabilities. The Company capitalized the costs incurred during the “development” and “enhancement” stages of the software and website development. Costs incurred during the “planning” and “post-implementation/operation” stages of development were expensed. The Company capitalized $69,000 and $16,000 for such projects for the years ended December 31, 2012 and 2013, respectively.