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Goodwill and Identified Intangible Assets

9 Months Ended

Sep. 30, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 2. Goodwill and Identified Intangible Assets

The changes in the carrying amount of goodwill for the nine months ended September 30, 2011 were as follows:

Balance at January 1, 2011	$	12,308,661
2011 activity		-
Balance at September 30, 2011	$	12,308,661

Identifiable intangible assets

The changes in the carrying amount of intangible assets for the nine months ended September 30, 2011 were as follows:

Balance at January 1, 2011	$	6,494,134
Amortization expense		(711,654	)
Balance at September 30, 2011	$	5,782,480

The Company has recorded the fair value of the acquired identifiable intangible assets, which are subject to amortization, using the income approach. The following table sets forth the components of these intangible assets as of September 30, 2011 and December 31, 2010:

		As of September 30, 2011
	Estimated	Adjusted					Net
	Useful	Carrying		Accumulated			as of
Amortized Intangible Assets	Life	Amount		Amortization			09/30/2011

Trade name	20 years	$	704,458	$	(174,163	)	$	530,295
Patents and copyrights	17 years		1,117,842		(324,870	)		792,972
Non-compete agreements	5 years		310,000		(129,167	)		180,833
Developed technology	7 years		3,941,310		(2,091,914	)		1,849,396
Backlog	3 years		303,400		(303,400	)		-
Non-contractual customer relationships	15 years		3,268,568		(839,584	)		2,428,984
		$	9,645,578	$	(3,863,098	)	$	5,782,480

	As of December 31, 2010
	Adjusted					Net
	Carrying		Accumulated			as of
Amortized Intangible Assets	Amount		Amortization			12/31/2010

Trade name	$	704,458	$	(137,486	)	$	566,972
Patents and copyrights		1,117,842		(277,259	)		840,583
Non-compete agreements		310,000		(82,667	)		227,333
Developed technology		3,941,310		(1,677,507	)		2,263,803
Backlog		303,400		(303,400	)		-
Non-contractual customer relationships		3,268,568		(673,125	)		2,595,443
	$	9,645,578	$	(3,151,444	)	$	6,494,134

The following summarizes amortization of acquisition related intangible assets included in the statement of operations:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
Cost of sales	$	196,188	$	197,853	$	591,896	$	593,561
General and administrative		39,916		39,921		119,758		119,763
	$	236,104	$	237,774	$	711,654	$	713,324

The Company expects that amortization expense for the next five succeeding years will be as follows:

Year 1	$	924,096
Year 2		907,223
Year 3		565,848
Year 4		310,458
Year 5		310,458

These amounts are subject to change based upon the review of recoverability and useful lives that are performed at least annually.

- 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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