Equipment Lease Payable

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

8. Equipment Lease Payable

In January 2012, the Company renegotiated the terms of a payable relating to certain equipment into a lease agreement for the same equipment.  The lease term is five years with a principal amount of $257,583 and an effective interest rate of 14.7% per annum.

Future minimum lease payments, by year and in the aggregate, under equipment leases, which includes capital leases, as of December 31, 2013, are as follows:

For year ending December 31,	Lease payments
2014	$	76,728
2015		75,807
2016		48,695
Total	$	201,230
Less: amount representing interest		(34,943	)
Present value of future lease payments	$	166,287
Less:  Current portion		(56,323	)
Long term portion	$	109,964

As of December 31, 2013, the equipment has a gross and net book value of $305,641 and $261,097, respectively. Depreciation of assets held under capital leases in the amount of $20,376 is included in depreciation expense for both years ended December 31, 2013 and 2012.