5. Capitalized Software

3 Months Ended

Mar. 31, 2013

Notes to Financial Statements

NOTE 5 - Capitalized Software

The Company accounts for the costs of software within its products in accordance with ASC Topic 985-20 “Costs of Software to be Sold, Leased or Marketed”, under which certain software costs incurred subsequent to the establishment of technological feasibility are capitalized and amortized over the estimated lives of the related products. The Company determines technological feasibility to be established upon the internal release of a detailed program design as specified by Topic 985-20. Upon the general release of the product to customers, development costs for that product are amortized over periods not exceeding five years, based on current and future revenue of the product. For the three months ended March 31, 2013, the Company recorded capitalized software of $150. For the three months ended March 31, 2013, the Company’s amortization cost was approximately $272, compared with $220 for the same period last year. Net capitalized software costs totaled $2,085 and $2,207 as of March 31, 2013 and December 31, 2012, respectively.