Note 6. Goodwill

12 Months Ended

Sep. 29, 2012

Goodwill Disclosure [Text Block]

6.  GOODWILL

As of September 29, 2012 and October 1, 2011, we had goodwill of $4,610,615 and $1,924,131, respectively. The goodwill is associated with the medical segment.  Goodwill has an indefinite useful life.

On December 9, 2011, we acquired, through a new wholly-owned subsidiary, substantially all of the assets of MCHP.  The following table is a reconciliation of the carrying amount of goodwill resulting from the M.C. Healthcare asset acquisition on December 9, 2011 and September 29, 2012.  Under Canadian tax law, we expect 75%, or approximately $2,000,000, of the goodwill acquired in connection with the asset acquisition to be deductible for tax purposes.  See Note 2.

Beginning balance at October 1, 2011	$	1,924,131
Asset acquisition on December 9, 2011		6,529,885
Adjustment for deferred taxes		53,149
Adjustment to increase inventories to fair market value		(160,281	)
Adjustment to allocate total consideration to other intangibles based on valuation		(3,971,748	)
Adjustment to record contingent consideration		68,166
Adjusted Goodwill at December 9, 2011		4,443,302
Increase in foreign currency exchange rate		167,313
Goodwill at September 29, 2012	$	4,610,615