Quarterly report pursuant to Section 13 or 15(d)

C. INTANGIBLE ASSETS AND GOODWILL

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C. INTANGIBLE ASSETS AND GOODWILL
9 Months Ended
Sep. 30, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
NOTE C - INTANGIBLE ASSETS AND GOODWILL

Total identifiable intangible assets acquired and their carrying values at September 30, 2014 are:

 

    Cost    

Accumulated

Amortization

    Accumulated Impairment     Carrying Value    

Weighted Average

Amortization Period

(Years)

 
Amortized Identifiable Intangible Assets:                              
Subscriber lists – EthoStream   $ 2,900,000     $ (1,822,643 )   $     $ 1,077,357       12.0  
Total Amortized Identifiable Intangible Assets     2,900,000       (1,822,643 )           1,077,357          
Goodwill – EthoStream   8,796,430             (3,000,000)        5,796,430          
Total Goodwill   8,796,430             (3,000,000)       5,796,430          
Total   $ 11,696,430     $ (1,822,643 )   $ (3,000,000)     $ 6,873,787          

 

Total identifiable intangible assets acquired and their carrying values at December 31, 2013 are:

 

    Cost    

Accumulated

Amortization

    Accumulated Impairment     Carrying Value    

Weighted Average

Amortization Period

(Years)

 
Amortized Identifiable Intangible Assets:                              
Subscriber lists – EthoStream   $ 2,900,000     $ (1,641,383 )   $     $ 1,258,617       12.0  
Total Amortized Identifiable Intangible Assets     2,900,000       (1,641,383 )           1,258,617          
Goodwill – EthoStream   8,796,430             (3,000,000)       5,796,430          
Goodwill – SSI   5,874,016             (5,874,016)         -          
Total Goodwill   14,670,446             (8,874,016)       5,796,430          
Total   $ 17,570,446     $ (1,641,383 )   $ (8,874,016)     $ 7,055,047          

 

Total amortization expense charged to operations for each of the three and nine months ended September 30, 2014 and 2013 was $60,420 and 181,260, respectively.

 

Estimated future amortization expense as of September 30, 2014 is as follows:

  

Remainder of 2014   $ 60,420  
2015     241,680  
2016     241,680  
2017     241,680  
2018     241,680  
2019     50,217  
Total   $ 1,077,357  

 

The Company does not amortize goodwill. The Company recorded goodwill in the amount of $14,670,446 as a result of the acquisitions of EthoStream and SSI during the year ended December 31, 2007. The Company evaluates goodwill for impairment based on the fair value of the reporting units to which this goodwill relates at least once a year. We utilize a discounted cash flow valuation methodology (income approach) to determine the fair value of the reporting unit. Since acquisition, the Company has written off $3,000,000 and $5,874,016 of goodwill for Ethostream and Smart Systems International, respectively.