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Note 9 - Intangible Assets
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Jun. 30, 2012
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| Intangible Assets Disclosure [Text Block] |
NOTE
9 – INTANGIBLE
ASSETS
Intangible
assets consisted of the following:
Product
licenses include internally-developed original license
issues, renewals, enhancements, copyrights, trademarks,
and trade names. Product licenses include unamortized
software development and enhancement costs of
$18,412,165. Product licenses are being amortized on a
straight-line basis over their respective lives, which is
currently a weighted average of approximately 8 years.
Amortization expense for the year ended June 30, 2012 and
2011 was $1,536,819 and $1,769,149, respectively.
On
October 31, 2008, the Company entered into an agreement
to purchase the rights to the customer list of Ciena
Solutions, LLC, a California limited liability company
(“Ciena”). Under the terms of the agreement,
the total consideration for these rights included an
initial payment of $350,000 (plus interest of $2,963),
and deferred consideration to be paid in cash and the
Company’s common stock based on the operational
results of Ciena, and certain other factors, over a
four-year fiscal period. Each fiscal period is measured
from July 1 to June 30 with fiscal period one being the
period from July 1, 2008 to June 30, 2009. No other
assets or liabilities were acquired by the Company as a
result of this transaction.
As
a result of operational losses of Ciena in the first
three fiscal periods, 2009 2010 and 2011, respectively,
the first three annual deferred consideration installment
payments were determined to be zero.
On
October 4, 2011, the company entered into an agreement to
acquire a UK based company “Virtual Leasing
Services Limited” through one of its subsidiaries.
As a result of this acquisition, the Company recorded
$248,320 of an existing customer list.
Customer
lists are being amortized based on a straight-line basis,
which approximates the anticipated rate of attrition,
which is currently a weighted average of approximately 5
years. Amortization expense for the year ended June 30,
2012 and 2011 was $145,808 and $501,860,
respectively.
On
October 4, 2011, the company entered into an agreement to
acquire a UK based company, Virtual Leasing Services
Limited, through one of its subsidiaries. As a result of
this acquisition, the Company recorded $242,702 of
existing technology. Technology assets are being
amortized on a straight-line basis over their respective
lives, which is currently a weighted average of
approximately 5 years. Amortization expense for the year
ended June 30, 2012 and 2011 was $36,405 and Nil.
Estimated
amortization expense of intangible assets over the next
five years is as follows:
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