Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets [Abstract]

9.	Goodwill and Intangible Assets

The Company has intangible assets primarily relating to the acquisitions of Jinan Broadband and Sinotop Hong Kong. The Company amortizes its intangible assets that have finite lives. As discussed in Note 4, the Company determined during 2011 that AdNet's remaining assets would no longer be used. As such, the Company recognized an impairment loss related to AdNet's software technology in the amount of $189,241 during the quarter ended June 30, 2011. For Jinan Broadband, we reclassified $159,132 from fixed assets to software and licenses during the quarter ended June 30, 2012.

A roll forward of our intangible assets activity for the nine months ended September 30, 2012 is as follows:

	Balance at							Deconsolidation			Foreign			Balance at
	December 31,				Amortization			of Shandong			Currency			September 30,
	2011		Additions		Expense			Media			Transl Adj			2012
														(unaudited)
Amortized intangible assets:
Service agreement	$	1,310,892	$	-	$	(64,470	)	$	-		$	-		$	1,246,422
Publication rights		400,953		-		(12,150	)		(388,803	)		-			-
Customer relationships		76,579		-		(5,890	)		(70,689	)		-			-
Operating permits		600,147		-		(18,186	)		(581,961	)		-			-
Charter / Cooperation agreements		2,560,616		-		(103,343	)		-			-			2,457,273
Noncompete agreement		1,576,256		-		(1,091,254	)		-			-			485,002
Software and licenses		240,015		569,106		(123,625	)		(4,066	)		487			681,917
Website development		250,000		100,000		(87,423	)		-			(443	)		262,134
Total amortized intangible assets	$	7,015,458	$	669,106	$	(1,506,341	)	$	(1,045,519	)	$	44		$	5,132,748

Unamortized intangible assets:
Website name		134,290		-		-			-			-			134,290
Goodwill		6,105,478		-		-			-			-			6,105,478
Total unamortized intangible assets	$	6,239,768	$	-	$	-		$	-		$	-		$	6,239,768

In accordance with ASC 250, we recorded amortization expense related to our intangible assets of approximately $504,000 and $1,507,000 for the three and nine months ended September 30, 2012 and $437,000 and $1,463,000 for the three and nine months ended September 30, 2011.

	Jinan		Sinotop
Years ending December 31,	Broadband		Hong Kong		Sinotop		Total
2012 (three months)	$	36,043	$	398,199	$	69,034	$	503,276
2013		134,303		259,041		276,134		669,478
2014		127,824		137,791		240,727		506,342
2015		112,909		137,791		97,317		348,017
2016		93,485		137,791		94,923		326,199
Thereafter		881,085		1,871,662		26,689		2,779,436
Total amortization to be recognized	$	1,385,649	$	2,942,275	$	804,824	$	5,132,748

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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