Intangible Assets

9 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Intangible Assets

Note 4. Intangible Assets

The Company purchased the stock of Morris and Smith in 2008, which resulted in the recognition of intangible assets. These intangible assets include the “employment and non-compete agreements” which are critical to the Company because of the management team’s business intelligence and customer relationship value which is required to execute the Company’s business plan. The intangibles also include their “company operating authority” and “customer lists.” In April, 2011 additional intangibles were recognized when the Company purchased the stock of Cross Creek.

The Company operating authorities are tied to their motor carrier numbers that are issued and monitored by the U.S. Department of Transportation (FDOT). The FDOT issues a rating to each company which has a direct impact on that company’s ability to attract and maintain a stable customer base as well as reduce the Company’s insurance costs, one of the most significant expenditures for freight companies. Morris and Smith and Cross Creek have the DOT’s highest rating, “Satisfactory,” which provides the Company with significant value.  However, in December, 2011, Cross Creek lost the safety rating as part of the cessation of its operations, immediately rendering its intangible assets as worthless. The customer lists adds value to the Company by providing an established cliental with established rates as well as predictable freight volume. A detailed review of the Cross Creek intangibles is in process.

These intangible are as follows:

	December 31,			March 31,
	2011			2011
Employment and non-compete agreements	$	1,043,293		$	1,043,293
Company operating authority and customer lists		2,302,070			891,958
Total intangible assets		3,347,374			1,935,251
Less: accumulated amortization		(3,347,374	)		(1,666,466	)
Intangible assets, net	$	-		$	268,785

In addition, when the Company originally purchased Triple C (see Notes 2 and 11) $466,424 of identified intangible assets were recognized. However, when the Company rescinded the Triple C purchase and reported Triple C as a “discontinued operation” previously identified intangible assets of Triple C were reported as impaired.

Amortization expense totaled $1,318,296 for the nine months ended December 31, 2011. Amortization expense for the year ended March 31, 2011 was $774,646, including $466,424 applicable to discontinued operations.