4. Asset Purchase Acquisitions (Tables)

9 Months Ended

Sep. 30, 2012

Business Acquisition [Line Items]

Unaudited Supplemental Pro Forma Results of Operations

	Combined Pro Forma:
	For the nine months ended September 30,
	2012			2011
Revenue:	$	919,085		$	1,627,281
Expenses:
Operating expenses		2,352,693			1,404,786
Net operating income (loss)		(1,433,608	)		222,495
Other income (expense)		(349,589	)		(34,607	)
Net income (loss)	$	(1,783,197	)	$	(187,888	)
Weighted average number of common shares
Outstanding – basic and fully diluted		137,591,052			30,448,294
Net income (loss) per share – basic and fully diluted	$	(0.01	)	$	(0.01	)

K9 Bytes [Member]

Business Acquisition [Line Items]

Schedule of Assets Acquired and Liabilities Assumed

	October 26,
	2011
Consideration:
Cash paid at closing	$	5,000
Small business loan(1)		169,250
Seller financed note payable(2)		30,750
Fair value of total consideration exchanged	$	205,000
Fair value of identifiable assets acquired assumed:
Accounts receivable	$	25,483
Inventories supplies		1,000
Equipment		1,273
Technology-based intangible assets		42,000
Customer base		11,000
Trade name		22,000
Non-compete agreement		15,000
Total fair value of assets assumed		117,756
Consideration paid in excess of fair value (Goodwill)(3)	$	87,244
(1)Consideration included partial proceeds obtained from a $235,000 Small Business Association (“SBA”) loan, carrying a term of ten (10) years; maturing on October 26, 2021, bearing interest at the prime rate plus 2.75% per annum, adjusted quarterly; and payable in monthly installments (beginning in December 2011) of $2,609 per month. The loan is guaranteed by the Company and personally guaranteed by Shaun Passley, the Company’s Chief Executive Officer; and is secured by all of the assets of K9 Bytes, Inc., the Illinois corporation and wholly-owned subsidiary formed to house the acquired assets and the Company, 100% of the outstanding capital of the K9 subsidiary, and a life insurance policy on Mr. Passley’s life in the amount of $235,000.
(2)Consideration included an unsecured $30,750 seller financed note payable, bearing 6% per annum and is payable in monthly installments of $333 per month starting in November 2011 and ending on October 26, 2014, at which time the then remaining balance of the K9 Note is due ($23,017, assuming no additional payments other than those scheduled).
(3)The consideration paid in excess of the net fair value of assets acquired and liabilities assumed has been recognized as goodwill.

MS Health [Member]

Business Acquisition [Line Items]

Schedule of Assets Acquired and Liabilities Assumed

	March 28,
	2012
Consideration:
Cash paid at closing	$	39,200
Small business loan(1)		360,800
Seller financed note payable(2)(3)		124,697
Fair value of total consideration exchanged	$	524,697
Fair value of identifiable assets acquired assumed:
Other current assets	$	7,367
Equipment		2,703
Contracts		258,000
Technology-based intangible assets		124,000
Non-compete agreement		18,000
Total fair value of assets assumed		410,070
Consideration paid in excess of fair value (Goodwill)(4)	$	114,627
(1)Consideration included partial proceeds obtained from a $360,800 Small Business Association (“SBA”) loan, bearing interest at fixed and variable rates. The initial interest rate is 5.5% per year for three (3) years, consisting of the Prime Rate in effect on the first business day of the month in which the SBA loan application was received, plus 2.25%. The loan terms then transition to a variable interest rate over the remaining seven (7) years of the ten (10) year maturity term, calculated at 2.25% above the Prime Rate, as adjusted quarterly. The Company must pay principal and interest payments of $3,916 monthly. The SBA Loan is guaranteed by PRMI, K9 Bytes, Desk Flex, Inc., MS Health and the Company, and secured by the assets of MS Health and the Company.
(2)Consideration included an unsecured $100,000 seller financed note payable (“MSHSC Note”), bearing interest at 6% per annum, a ten (10) year amortization, a right of offset, no payments of either principal or interest for two (2) years and equal payments of principal and interest commencing in year 3, no prepayment penalty, and full payment of all amounts due after five (5) years. The MSHSC Note is secured by a security interest over the assets of MS Health. We did not purchase and MSHSC agreed to retain and be responsible for any and all liabilities of MSHSC.
(3)The fair value of the seller financed note in excess of the $100,000 principal balance attributable to the deferred payment terms will be amortized to interest expense over the deferred financing period.
(4)The consideration paid in excess of the net fair value of assets acquired and liabilities assumed has been recognized as goodwill.