Acquisition and Intangible Assets

3 Months Ended

Mar. 31, 2018

Intangible Assets

Acquisitions and Intangible Assets

The Company holds several patents for the real-time calculation of shipping costs for items purchased through online auctions using a zip code as a destination location indicator. It includes shipping charge calculations across multiple carriers and accounts for additional characteristics of the item being shipped, such as weight, special packaging or handling, and insurance costs. These patents help facilitate rapid and accurate estimation of shipping costs across multiple shipping carriers and also include real-time calculation of shipping.

On October 7, 2015, the Company, through a newly formed limited liability company named PAID Run, LLC, entered into an asset purchase agreement to purchase assets related to BeerRun Software and SpiritRun Software and related intellectual property. The purchase price and additional development for these assets was $297,500, which include all of the client lists, along with all rights, benefits and privileges associated with the software and intellectual property, associated contracts, and books and records.

On December 30, 2016, the Company completed a merger with ShipTime Inc. and its subsidiary (“ShipTime”) to acquire assets related to the technology, client base and other intellectual property. The Company engaged an outside independent third party valuation firm to assist in establishing a value for the ShipTime acquisition.

At March 31, 2018 and December 31, 2017, intangible assets consisted of the following:

	March 31, 2018			December 31, 2017
Patents	$	16,000		$	16,000
Software		83,750			83,750
Trade Name		830,681			850,311
Technology		530,510			540,201
Client list / relationship		4,876,823			4,998,130
Accumulated amortization		(1,176,741	)		(986,070	)
	$	5,161,023		$	5,502,322

Amortization expense of intangible assets for all subsidiaries for the three months ended March 31, 2018, and 2017 was $214,312 and $203,070, respectively.

Goodwill

Goodwill represents the excess of the purchase price of the acquired business over the estimated fair value of the underlying net tangible and intangible assets acquired. In the event the Company determines that the value of goodwill has become impaired, it will incur an accounting charge for the amount of the impairment during the fiscal quarter in which the determination is made. None of the goodwill is expected to be deductible for income tax purposes.

For the three months ended March 31, 2018, goodwill activity was as follows:

	For the Three Months Ended March 31,
	2018
Beginning Balance	$	10,695,120
Effect of exchange rate changes		(283,202	)
Ending Balance	$	10,411,918