Quarterly report pursuant to Section 13 or 15(d)

C. INTANGIBLE ASSETS AND GOODWILL

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C. INTANGIBLE ASSETS AND GOODWILL
3 Months Ended
Mar. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
NOTE C - INTANGIBLE ASSETS AND GOODWILL

Total identifiable intangible assets acquired and their carrying values at March 31, 2014 are:

 

    Cost     Accumulated
Amortization
    Accumulated Impairment     Carrying Value     Weighted Average
Amortization Period
(Years)
 
Amortized Identifiable Intangible Assets:                              
Subscriber lists – EthoStream   $ 2,900,000     $ (1,701,803 )   $     $ 1,198,197       12.0  
Total Amortized Identifiable Intangible Assets     2,900,000       (1,701,803 )           1,198,197        
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     $ (1,701,803 )   $ (3,000,000 )   $ 6,994,627        

 

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 months ended March 31, 2014 and 2013 was $60,420.

 

Estimated future amortization expense as of March 31, 2014 is as follows:

  

Remainder of 2014   $ 181,260  
2015     241,680  
2016     241,680  
2017     241,680  
2018     241,680  
2019     50,217  
Total   $ 1,198,197  

 

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.