Intangible Assets |
6 Months Ended | ||||||||||||||||||||
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Jun. 30, 2015 | |||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||
| Intangible Assets |
NOTE 6 – INTANGIBLE ASSETS
Intangible Assets
On July 16, 2014, we entered into a sales purchase agreement in 100% acquisition of all outstanding shares of Lexi Luu. Designs. Bitzio paid 500,000,000 restricted commons shares for this acquisition. Lexi Luu shareholders are able to earn an additional $300,000 in restricted common shares over the course of years in an earn out upon hitting certain revenue benchmarks. We accounted for the transaction as an equity purchase. Of the purchase price paid as of July 16, 2014 ($183,629) was allocated among the assets and liabilities and difference was taken to intangible assets in amount of $690,629. As of June 30, 2015, the net carrying amount is $360,452. This intangible assets will be amortized over life of 2 years, estimated amortization expense for 2015 and 2016 are $174,076 and $186,376 respectively.
On July 18, 2014, we entered into a sales purchase agreement in 100% acquisition of all outstanding shares of E-motion Apparel. Designs. Bitzio paid 350,000,000 restricted commons shares for this acquisition. E-motion Apparel shareholders are able to earn an additional $300,000 in restricted common shares over the course of years in an earn out upon hitting certain revenue benchmarks. We accounted for the transaction as an equity purchase. Of the purchase price paid as of July 18, 2014 ($26,235) was allocated among the assets and liabilities and difference was taken to intangible assets in amount of $74,235. As of June 30, 2015, the net carrying amount is $38,795. This intangible assets will be amortized over life of 2 years, estimated amortization expense for 2015 and 2016 are $18,712 and $20,236 respectively.
On February 26, 2015, Lexi Luu entered into and closed under a securities purchase agreement to acquire 100% of all outstanding shares of Skipjack Dive and Dancewear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $100,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into 1,000,000 shares of common stock of the Company. Of the purchase price paid as of February 26, 2015 ($15,249) was allocated among the assets and liabilities and difference was taken to intangible assets in amount of $84,751. As of June 30, 2015, the net carrying amount is $70,355. This intangible assets will be amortized over life of 2 years, estimated amortization expense for 2015, 2016, and 2017 are $21,362 and $42,492, and $6,501 respectively.
On March 3, 2015, Lexi Luu entered into and closed under a securities purchase agreement to acquire 100% of all outstanding shares of Punkz Gear, Inc., in exchange for a 2% subordinate secured term note in the aggregate principal amount of $200,000. The note has a maturity date of September 30, 2015, and is convertible at the rate of $0.10 per share into 2,000,000 shares of common stock of the Company. Of the purchase price paid as of March 3, 2015 ($24,062) was allocated among the assets and liabilities and difference was taken to intangible assets in amount of $175,938. As of June 30, 2015, the net carrying amount is $147,740. This intangible assets will be amortized over life of 2 years, estimated amortization expense for 2015, 2016, and 2017 are $44,346, and $88,210, and $14,702 respectively.
Amortization of intangible assets is computed using the straight-line method and is recognized over the estimated useful lives of the intangible assets. Amortization expense was $104,877 and $0 for the six months ended June 30, 2015 and 2014, respectively.
Estimated amortization expense for the intangible assets for the next five years consists of the following:
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