Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Purchased Intangibles

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Goodwill and Purchased Intangibles
3 Months Ended
Mar. 31, 2014
Notes to Financial Statements  
Goodwill and Purchased Intangibles

Goodwill

 

The carrying value of goodwill at March 31, 2014 and December 31, 2013 was $5,999,765 and $3,108,964, respectively. Goodwill at March 31, 2014 includes $2,890,801 recorded as a result an acquisition in March 2014. See Note 3.

  

Intangible assets

 

The following table presents details of our purchased intangible assets as of March 31, 2014 and December 31, 2013:

 

    Balance at                 Balance at  
    December 31, 2013     Additions     Amortization     March 31, 2014  
Patents and trademarks   $ 118,098     $ -     $ (2,287 )   $ 115,811  
Customer contracts     541,528       -       (25,033 )     516,495  
Customer and merchant relationships     -       2,010,000       (10,806 )     1,999,194  
Trade name     22,391       176,000       (3,368 )     195,023  
Acquired technology     182,298       260,000       (17,394 )     424,904  
Non-compete agreement     71,001       -       (7,345 )     63,656  
    $ 935,316     $ 2,446,000     $ (66,233 )   $ 3,315,083  

 

The intangible assets are being amortized on a straight line basis over their estimated useful lives of one to ten years.

 

During the three months ended March 31, 2014, the following intangible assets were purchased with the following useful lives:

 

SmartReceipt, Inc.:

    Fair value   Useful Life
Merchant relationships   $ 2,010,000   10 years
Trade name   $ 176,000   10 years
Developed technology   $ 260,000   10 years

 

Amortization expense for intangible assets was $66,233 and $31,957 for the three months ended March 31, 2014 and 2013, respectively.

 

The estimated future amortization expense of our intangible assets as of March 31, 2014 is as follows:

 

Year ending December 31,   Amount  
2014   $ 342,693  
2015     462,976  
2016     385,040  
2017     339,669  
2018     333,820  
Thereafter     1,450,885  
Total   $ 3,315,083