Quarterly report pursuant to Section 13 or 15(d)

NOTE C - INTANGIBLE ASSETS AND GOODWILL

v2.3.0.15
NOTE C - INTANGIBLE ASSETS AND GOODWILL
9 Months Ended
Sep. 30, 2011
Goodwill and Intangible Assets Disclosure [Text Block]
NOTE C - INTANGIBLE ASSETS AND GOODWILL

Total identifiable intangible assets acquired and their carrying values at September 30, 2011 are:

   
 
 
Cost
   
Accumulated Amortization
   
Net Book Value
   
Residual
Value
   
Weighted
Average
Amortization
Period (Years)
 
Amortized Identifiable Intangible Assets:
                             
Subscriber lists – EthoStream
 
$
2,900,000
   
$
(1,097,603
)
 
$
1,802,397
   
$
-
     
12.0
 
Total Amortized Identifiable Intangible Assets
   
2,900,000
     
(1,097,603
)
   
1,802,397
     
-
         
Goodwill – EthoStream
 
5,796,430
     
-
     
5,796,430
     
-
         
Goodwill – SSI
 
5,874,016
     
-
     
5,874,016
     
   -
         
Total
 
$
14,570,446
   
$
(1,097,603
)
 
$
13,472,843
   
$
-
         

Total identifiable intangible assets acquired and their carrying values at December 31, 2010 are:

   
Cost
   
Accumulated Amortization
   
Net Book Value
   
Residual
Value
   
Weighted
Average
Amortization
Period
(Years)
 
Amortized Identifiable Intangible Assets:
                             
Subscriber lists – EthoStream
 
$
2,900,000
   
$
(916,343
)
 
$
1,983,657
   
$
-
     
12.0
 
Total Amortized Identifiable Intangible Assets
   
2,900,000
     
(916,343
)
   
1,983,657
     
-
         
Goodwill – EthoStream
 
5,796,430
     
-
     
5,796,430
     
-
         
Goodwill – SSI
 
5,874,016
     
-
     
5,874,016
     
   -
         
Total
 
$
14,570,446
   
$
(916,343
)
 
$
13,654,103
   
$
-
         

Total amortization expense charged to operations for both the three and nine months ended September 30, 2011 and 2010 was $60,420 and $181,260, respectively.

Estimated amortization expense as of September 30, 2011 is as follows:

Remainder of 2011
 
$
60,420
 
2012
   
241,680
 
2013
   
241,680
 
2014
   
241,680
 
2015 and after
   
1,016,937
 
Total
 
$
1,802,397
 

The Company does not amortize goodwill. The Company recorded goodwill in the amount of $14,670,455 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. The Company generally determines the fair value of a reporting unit using a combination of the income approach, which is based on the present value of estimated future cash flows, and the market approach, which compares the business unit's multiples to its competitors.