Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

5. Goodwill and Intangible Assets

Changes in the carrying amount of goodwill were as follows for the nine months ended September 30, 2012:

Beginning balances, January 1, 2012	$	18,193,561
Additions:
Purchase adjustment related to Avalon Global Solutions, Inc.
liability reduction (1)		33,150
Reductions:
Purchase adjustment related to Avalon Global Solutions, Inc.
net working capital adjustment (2)		(76,539	)
Ending balances, September 30, 2012	$	18,150,172

(1) In connection with the acquisition of Avalon Global Solutions (“AGS”), we paid additional vendor liabilities as part of the acquisition agreement.

(2) In connection with the acquisition of AGS a portion of the sales proceeds held in escrow were subject to satisfaction of a minimum level of net working capital which had not been met and we received a return from escrow for the difference.

We have not identified any quantitative or qualitative factors for segment goodwill that would indicate impairment exists at September 30, 2012.

The Company also has material intangible assets consisting of purchased intangibles and internally developed software used in the conduct of business. There were no additions to intangible assets for the three and nine month period ended September 30, 2012. There were fully amortized developed software intangibles with an original cost and accumulated amortization of approximately $1,239,000 disposed of during the nine month period ended September 30, 2012.

The aggregate amortization expense recorded for the three month period ended September 30, 2012 and 2011 was approximately $390,170 and $123,460, respectively. The aggregate amortization expense recorded for the nine month period ended September 30, 2012 and 2011 was approximately $1,170,510 and $416,900, respectively. The total weighted average life of purchased and internally developed intangible assets is approximately 3.00 years, respectively, at September 30, 2012.