Mobivity Holdings Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Purchased Intangibles

Goodwill and Purchased Intangibles

6 Months Ended

Jun. 30, 2014

Goodwill

The carrying value of goodwill at June 30, 2014 and December 31, 2013 was $5,999,765 and $3,108,964, respectively. Goodwill at June 30, 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 June 30, 2014 and December 31, 2013:

	Balance at							Balance at
	December 31, 2013		Additions		Amortization			June 30, 2014
Patents and trademarks	$	118,098	$	-	$	(4,573	)	$	113,525
Customer contracts		541,528		-		(50,064	)		491,464
Customer and merchant relationships		-		2,010,000		(61,056	)		1,948,944
Trade name		22,391		176,000		(10,190	)		188,201
Acquired technology		182,298		260,000		(39,890	)		402,408
Non-compete agreement		71,001		-		(14,691	)		56,310
	$	935,316	$	2,446,000	$	(180,465	)	$	3,200,852

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

During the six months ended June 30, 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 $114,232 and $56,382 for the three months ended June 30, 2014 and 2013, respectively.

Amortization expense for intangible assets was $180,465 and $88,339 for the six months ended June 30, 2014 and 2013, respectively.

The estimated future amortization expense of our intangible assets as of June 30, 2014 is as follows:

Year ending December 31,	Amount
2014	$	228,461
2015		462,976
2016		385,038
2017		339,669
2018		333,822
Thereafter		1,450,886
Total	$	3,200,852

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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