Note 4. Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2013

Note 4. Goodwill And Intangible Assets Tables

Fair value of PIR intangible assets and goodwill

Total Consideration	$	3,450,000
Plus:  Liabilities assumed in excess of tangible assets		1,564,030
Total fair value of PIR intangible assets and goodwill	$	5,014,030
Allocation of PIR intangible assets and goodwill:
Amortizable intangible assets	$	3,300,000
Trademarks		720,000
Goodwill		994,030
Total fair value of PIR intangible assets and goodwill	$	5,014,030

Assets and liabilities acquired

Cash	$	271,602
Accounts receivable		1,405,208
Prepaid expenses and other assets		366,876
Furniture, equipment, and improvements		297,076
Deposits		10,283
Total assets		2,351,045
Accounts payable and accrued expenses		(1,352,831	)
Deferred revenue		(1,452,780	)
Net tax liabilities		(1,109,464	)
Total liabilities		(3,915,075	)
Liabilities assumed in excess of tangible assets	$	(1,564,030)

Amortizable intangible assets

	Asset Amount		Useful Life (years)
Client relationships	$	1,480,000		7
Customer list		1,270,000		3
Software		550,000		3
	$	3,300,000

Unaudited condensed pro-forma financial results

	Year Ended
	December 31,
	2013		2012
Revenues		15,892,000		17,987,000
Net Income		776,000		833,000
Basic earnings per share		0.40		0.44
Diluted earnings per share		0.38		0.42

Components of goodwill and intangible assets

	December 31, 2013
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer lists	$	1,770,000	$	(373,883	)	$	1,396,117
Customer relationships-noncontractual		1,505,000		(100,690	)		1,404,310
Proprietary software		601,000		(108,298	)		492,702
Trademarks		720,000		—			720,000
Goodwill		1,056,873		—			1,056,873
Total intangible assets	$	5,652,873	$	(582,871	)	$	5,070,002

	December 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer lists	$	500,000	$	(128,333	)	$	371,667
Customer relationships-noncontractual		25,000		(25,000	)		-
Proprietary software		51,000		(34,333	)		16,667
Goodwill		43,195		—			43,195
Total intangible assets	$	619,195	$	(187,666	)	$	431,529

Schedule of future amortization of intangible assets

Years Ending December 31:
2014	$	920,429
2015		912,095
2016		690,248
2017		211,762
2018		211,429
Thereafter		347,166
Total	$	3,293,129