Quarterly report pursuant to Section 13 or 15(d)

Fixed Assets

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Fixed Assets
6 Months Ended
Jun. 30, 2017
Property, Plant and Equipment [Abstract]  
Fixed Assets

NOTE 8 - FIXED ASSETS

 

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

 

    December 31, 2016     June 30, 2017  
          (Unaudited)  
             
Equipment   $ 1,678,000     $ 964,000  
Computer software and website development     5,874,000       5,591,000  
Computer hardware     2,761,000       2,438,000  
Furniture and fixtures     401,000       405,000  
Automobiles     60,000       60,000  
Leasehold improvements     181,000       181,000  
                 
      10,955,000       9,639,000  
Accumulated depreciation and amortization     (7,880,000 )     (6,703,000 )
                 
    $ 3,075,000     $ 2,936,000  

 

As of December 31, 2016 and June 30, 2017, the Company had expenditures of approximately $1,919,000 and $4,000, respectively, for computer software and website development which had not been placed in service. Depreciation expense is not recorded for such assets until they are placed in service.

 

Depreciation and amortization expense of fixed assets for the three- and six-month periods ended June 30, 2016 was $143,000 and $286,000, respectively, and for the three- and six-month periods ended June 30, 2017 was $200,000 and $326,000, respectively. This includes amortization of costs associated with computer software and website development for the three- and six-month periods ended June 30, 2016 of $44,000 and $87,000, respectively, and for the three- and six-month periods ended June 30, 2017 of $114,000 and $150,000, respectively.

 

The Company capitalizes in fixed assets the costs of software development and website development. Specifically, the assets comprise an implementation of 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 $278,000 and $90,000 for such projects for the six-month periods ended June 30, 2016 and 2017, respectively.