INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 11 - INTANGIBLE ASSETS

As of December 31, 2012, the Company had recorded intangible assets totaling $508,600, which included $218,600 as a result of its acquisition of SG Technologies Corp (see “NOTE 3 – ACQUISITION – SGT”), $230,000 related to its acquisition of Greners (see “NOTE 4 – ASSET PURCHASE – GRENERS.COM”), and $60,000 related to its acquisition of Urban Garden Supply (see “NOTE 5 – PURCHASE – URBAN GARDEN”). On June 7, 2013, The Company acquired Rocky Mountain Hydroponics, LLC and Evergreen Garden Center, LLC (“RMH/EGC”) (see “NOTE 6 – PURCHASE – ROCKY MOUNTAIN HYDROPONICS and EVERGREEN GARDEN CENTER”), which resulted in the Company recording intangible assets of $366,000 related to the estimated value of both the workforce and trademarks/brand associated with RMH/EGC.

During the year ended December 31, 2013, the Company recorded amortization expense of $108,996 in relation to its non-RMH/EGC intangible assets. The Company also recorded $42,700 of amortization expense related to its RMH/EGC intangible assets during the year ended December 31, 2013.

At December 31, 2013, the Company evaluated its intangible assets and subsequently recorded a non-cash impairment of intangible assets expense in the amount of $262,604, all of which was related to its non-RMH/EGC intangible assets. Of the $262,604, $172,004 was related to the impairment of the intangible assets originally recorded as part of the SGT acquisition. As of December 31, 2013, the net book value of these intangible assets was $172,004, and given that the Company’s Phototron and SG Technologies subsidiaries recorded net losses totaling $339,840 during the year ended December 31, 2013, the Company deemed it to be a low probability of realizing future value related to these intangible assets. As of December 31, 2013, the Company had zero intangible assets recorded related to the SGT acquisition.

The Company also wrote-down the value of its Greners intangible assets by $50,604, to reflect a net book value of $133,400 as of December 31, 2013. Since acquiring Greners in July 2012, this unit has incurred net losses totaling approximately $96,600. As a result, the Company adjusted the December 31, 2013 net book value of these intangible assets to reflect the $96,600 net loss incurred since July 2012 ($230,000 - $96,600 = $133,400).

The remaining $39,996 of impairment of intangible assets reflects the write-off of the remaining net book value of the intangible assets related to the Company’s acquisition of Urban Garden Supply as of December 31, 2013. This unit has incurred losses totaling approximately $78,000 since its acquisition in October 2012, which exceeds the entire value of the original $60,000 of intangible assets recorded by the Company.

The following is a summary of the Company’s intangible assets:

Intangible assets as of December 31, 2012	$	508,600
Intangible assets recorded related to RMH/EGC acquisition		366,000
FY 2013 amortization of non-RMH/EGC intangible assets		(108,996	)
FY 2013 amortization of RMH/EGC intangible assets		(42,700	)
FY 2013 impairment of non-RMH/EGC intangible assets		(262,604	)
Net intangible assets as of December 31, 2013	$	460,300