XML 73 R14.htm IDEA: XBRL DOCUMENT v2.4.0.6
Intangible Assets
12 Months Ended
Dec. 31, 2012
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block]
7. Intangible Assets

 

The Company has material intangible assets consisting of purchased intangibles and internally developed software used in the conduct of business. The following table summarizes purchased and internally developed intangible assets subject to amortization as follows:

 

    DECEMBER 31, 2012  
                      Weighted  
                      Average  
    Gross Carrying     Accumulated     Net Book     Amortization  
    Amount     Amortization     Value     Period  
                         
Customer Relationships   $ 2,890,000     $ (1,005,835 )   $ 1,884,165       7  
Channel Relationships     540,000       (108,000 )     432,000       5  
Telecommunications Software     2,450,000       (700,000 )     1,750,000       5  
Cybersecurity Software     669,171       (348,344 )     320,827       3  
Trade Name and Trademarks     225,000       (22,750 )     202,250       2  
Non-Compete Agreements     780,000       (400,001 )     379,999       3  
                                 
    $ 7,554,171     $ (2,584,930 )   $ 4,969,241          

 

For the year ended December 31, 2012 there were disposals of fully amortized customer relationships, telecommunications software and cybersecurity software intangibles with gross historical cost and accumulated amortization of approximately $1.1 million, $0.5 million and $1.2 million, respectively.

 

    DECEMBER 31, 2011  
        Weighted  
                      Average  
    Gross Carrying     Accumulated     Net Book     Amortization  
    Amount     Amortization     Value     Period  
                         
Customer Relationships   $ 4,035,523     $ (1,752,191 )   $ 2,283,332       5  
Channel Relationships     540,000       -       540,000       5  
Telecommunications Software     2,450,000       (780,796 )     1,669,204       4  
Cybersecurity Software     2,281,718       (1,404,277 )     877,441       4  
Trade Name and Trademarks     225,000       (145,750 )     79,250       5  
Non-Compete Agreements     780,000       -       780,000       2  
                                 
    $ 10,312,241     $ (4,083,014 )   $ 6,229,227          

 

For the year ended December 31, 2012, the Company did not complete any business combinations or purchase intangible assets from a third party. During the year ended December 31, 2012, the Company completed its determination of the fair value of intangibles acquired in connection with a business combination, increased the value of identified intangible assets from $4,492,428 to $5,320,000 as of December 31, 2011 and increased the useful lives of acquired intangibles from provisional estimates. See Note 3 for additional information about the fair value adjustments recorded to intangible assets in connection with this business combination.

 

For the year ended December 31, 2012, the Company recorded capitalized software costs related to our Cybersecurity software totaling approximately $132,000. For the year ended December 31, 2011, the Company recorded capitalized software costs totaling approximately $351,000.

 

The total weighted average life of purchased and internally developed intangible assets is approximately 6.0 years and 4.0 years, respectively, at December 31, 2012 and 2011. The following table summarizes reflects estimated future amortization for purchased intangible assets for fiscal years ending December 31:

 

  2013     $ 1,355,974  
  2014       1,120,385  
  2015       737,549  
  2016       691,167  
  2017       569,166  
  Thereafter       495,000  
             
  Total     $ 4,969,241  

 

The aggregate amortization expense recorded was approximately $1,392,400 and $526,300 for the years ended December 31, 2012 and 2011, respectively.