Annual report pursuant to Section 13 and 15(d)

Capital Lease Obligations

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Capital Lease Obligations
12 Months Ended
Dec. 31, 2016
Capital Lease Obligations [Abstract]  
Capital Lease Obligations

Note 5 – Capital Lease Obligations

 

The company entered into a new lease agreement with Systems Trading, Inc. on May 1, 2015 to refinance all outstanding leases into one capital lease. This lease obligation is payable to Systems Trading, Inc. with monthly installments of $21,826 from June 1, 2015 through May 1, 2018. This lease is secured with the computer equipment and has been capitalized. Pursuant to Accounting Standards Codification (“ASC”) 470-50-40, Debt Modifications and Extinguishments-Derecognition, the Company determined that modification accounting applied to the refinancing. The new capital lease obligation has an effective interest rate of 7.22%.

 

On July 10, 2015, the Company entered into a lease with Systems Trading, Inc. The lease is for $14,443, calls for monthly payments of $420 and expires on August 1, 2018. It carries an interest rate of 3%. On November 1, 2015, the Company added to the existing lease with Systems Trading. The lease addendum totaled $7,998, calls for monthly payments of $258 and expires on August 1, 2018. It carries no interest.

  

Future minimum lease payments under the capital leases are as follows:

  

As of December 31, 2016   $ 405,958  
Less amount representing interest     (18,056 )
Total obligations under capital leases     387,902  
Less current portion of obligations under capital leases     (254,078 )
Long-term obligations under capital leases   $ 133,824  

 

Long-term obligations under capital leases at December 31, 2016 mature as follows:

 

Year ending December 31,      
       
2017   $ 254,078  
2018     133,824  
      -  
      -  
    $ 387,902  

 

The assets held under the capital leases are included in property and equipment as follows:

 

Equipment   $ 1,361,995  
Less: accumulated depreciation     1,150,597  
    $ 211,398