Quarterly report pursuant to Section 13 or 15(d)

C. INTANGIBLE ASSETS AND GOODWILL

v2.4.0.8
C. INTANGIBLE ASSETS AND GOODWILL
6 Months Ended
Jun. 30, 2013
Goodwill and Intangible Assets Disclosure [Abstract]  
NOTE C - INTANGIBLE ASSETS AND GOODWILL

Total identifiable intangible assets acquired and their carrying values at June 30, 2013 are:

 

    Cost     Accumulated
Amortization
    Carrying Value     Weighted Average
Amortization
Period (Years)
 
Amortized Identifiable Intangible Assets:                                
Subscriber lists – EthoStream   $ 2,900,000     $ (1,520,543 )   $ 1,379,457       12.0  
Total Amortized Identifiable Intangible Assets     2,900,000       (1,520,543 )     1,379,457          
Goodwill – EthoStream     5,796,430             5,796,430          
Goodwill – SSI     2,774,016             2,774,016          
Total Goodwill     8,570,446             8,570,446          
Total   $ 11,470,446     $ (1,520,543 )   $ 9,949,903          

 

Total identifiable intangible assets acquired and their carrying values at December 31, 2012 are:

 

    Cost     Accumulated
Amortization
    Accumulated Impairment     Carrying Value     Weighted Average
Amortization Period
(Years)
 
Amortized Identifiable Intangible Assets:                                        
Subscriber lists – EthoStream   $ 2,900,000     $ (1,399,703 )   $     $ 1,500,297       12.0  
Total Amortized Identifiable Intangible Assets     2,900,000       (1,399,703 )           1,500,297          
Goodwill – EthoStream     8,796,430             (3,000,000 )     5,796,430          
Goodwill – SSI     5,874,016             (3,100,000 )     2,774,016          
Total Goodwill     14,670,446               (6,100,000 )     8,570,446          
Total   $ 17,570,446     $ (1,399,703 )   $ (6,100,000 )   $ 10,070,743          

 

Total amortization expense charged to operations for each of the three and six months ended June 30, 2013 and 2012 was $60,420 and $120,840.

 

Estimated future amortization expense as of June 30, 2013 is as follows:

 

Remainder of 2013   $ 120,840  
2014     241,680  
2015     241,680  
2016     241,680  
2017     241,680  
2018 and after     291,897  
Total   $ 1,379,457  

 

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 operating business 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 $3,100,000 of goodwill for Ethostream and Smart Systems International, respectively.