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Ntoe 8 - Intangible assets
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Dec. 31, 2011
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| Intangible Assets Disclosure [Text Block] |
NOTE
8 - INTANGIBLE ASSETS
Intangible
assets consisted of the following:
(A)
Product Licenses
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 $21,801,891. 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
six-months ended December 31, 2011 and 2010 was $647,717 and
$828,578, respectively.
(B)
Customer Lists
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 six-months ended December 31,
2011 and 2010 was $59,847 and $250,930, respectively.
(C)
Technology
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 six-months ended December 31,
2011 and 2010 was nominal.
(D)
Future Amortization
Estimated
amortization expense of intangible assets over the next five
years is as follows:
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