Note 3 - Intangible Assets

12 Months Ended

Mar. 31, 2012

Intangible Assets Disclosure [Text Block]

Note 3 – Intangible Assets

Customer Relationships

The customer relationships are being amortized over the period of seven years from the acquisition date of October 1, 2009. The goodwill is not subject to amortization and will not be deductible for income tax purposes. During the years ended March 31, 2012 and 2011, the Company recorded amortization expense to cost of goods sold related to the customer relationship of $28,936 and $28,556, respectively. The net carrying value of the customer relationship as of March 31, 2012 was $130,108. Future amortization expense of the customer relationship is expected to be as follows for the years ending March 31: $28,857, $28,857, $28,857 $28,857, and $14,680 in 2013, 2014, 2015, 2016 and 2017, respectively. Goodwill represents expected synergies from the merger of operations. These synergies include a full management team and a formalized corporate organizational structure to expand the operations.  In addition, there were limited intangible assets in which did not qualify for separate recognition, such as an established workforce, but the effects on the consolidated financial statements are immaterial.

Pending Patents

In connection with the pending patents acquired from WES, the Company is amortizing the value of the patents over an estimated life of 15 years, which is the approximate remaining life and projected cash flows of the pending patents. During the year ended March 31, 2012, the Company amortized $12,166, which is included in general and administrative expense. At March 31, 2012, the net carrying value of the pending patents was $118,335. See Note 1 for a description related to a change in the agreement with WES. As of March 31, 2012, none of the contingent consideration under the WES Agreement had been triggered. As of March 31, 2012, the patent life was approximately 14 years of which $8,452 is expected to be amortized annually until fully amortized.