Goodwill and Intangible Assets

Changes in the carrying amount of goodwill were as follows for the nine months ended September 30, 2014:

	SEPTEMBER 30,
	2014		2013
	(unaudited)
Beginning balances, January 1,	$	16,618,467	$	16,618,467
Additions:
Acquisition of Soft-ex Communications Ltd.		4,220,460		-

Ending balances, September 30,	$	20,838,927	$	16,618,467

The Company considered whether there were indicators of impairment during the nine month period ended September 30, 2014 and determined that there were no quantitative or qualitative factors that would indicate impairment exists.

The Company’s intangible assets are comprised of purchased intangibles consisting of customer relationships, channel relationships, telecommunications software, trade names and trademarks and non-compete agreements. The Company’s intangible assets also include internally developed software used in the sales and delivery of its MMS offering. The Company has intangible assets with a net carrying value of $3,728,542 as of September 30, 2014. The aggregate intangible asset amortization expense recorded for the three and nine month periods ended September 30, 2014 and 2013 was approximately $353,000, $336,900, $1,008,400 and $1,025,700, respectively. The total weighted average life of purchased and internally developed intangible assets is approximately 3.7 years at September 30, 2014.

During the second quarter of 2014, the Company completed the acquisition of SCL (as more fully described in Note 3 above) and included the carrying value of intangible assets on a preliminary basis until a detailed fair value calculation is prepared. As the final fair value calculations are being prepared, increases or decreases in the fair value of relevant balance sheet amounts will result in adjustments, which may create material differences in preliminary provisional goodwill and intangible balances and weighted average intangible asset amortization life presented herein.

For the three month period ended September 30, 2014 there were no additions of internally developed (cybersecurity software) intangible assets. For the nine month period ended September 30, 2014 there were additions of internally developed (cybersecurity software) intangible assets of approximately $138,800. There were no disposals of intangible assets for the three and nine month periods ended September 30, 2014. There were no material additions or dispositions of intangible assets for the three and nine month periods ended September 30, 2013.