INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 9. INTANGIBLE ASSETS

Merchant Portfolios

The following table reflects the Company’s merchant portfolio at their cost and net carrying value as of December 31, 2013:

			Remaining
	Fair		Useful Life in	Accumulated
	Market Value		Months	Amortization		Net

TOT BPS, LLC	$	1,852,851	15	$	852,247	$	1,000,604
TOT HPS, LLC		102,050	15		46,939		55,111
TOT FBS, LLC		968,010	22		325,304		642,706
	$	2,922,911		$	1,224,490	$	1,698,421

The useful lives of merchant portfolios represent management’s best estimate over which the Company will recognize the economic benefits of these intangible assets.

Subsequent to the balance sheet date the Company was informed that its lawsuit with First Data Corp. was dismissed. The company subsequently filed an appeal, however, since the likelihood of successfully pursuing the recoupment of the portfolios appears to be remote; the Company has impaired the net asset value of the portfolio belonging to Process Pink, LLC as of December 31, 2013. As a result, the Company has written off the portfolio value (net of accumulated amortization) in the amount of $872,354. The Company has recognized this charge as a loss from impairment of portfolios in the accompanying statement of operations and comprehensive loss.

The Company capitalizes certain costs for website development projects. Specifically, the Company capitalizes projects that are significant in terms of functional value added to the site. A capitalized project would be closer to a full product launch than an incremental or point release update. Costs for updates are expensed as incurred. Capitalized costs are amortized over 24 months on a straight-line basis. The Company also capitalizes projects from the point of start to the point the application, service or website is publicly launched. Amortization is straight-line over 24 months. Impairment is reviewed quarterly to ensure only viable active project costs are capitalized. Capitalized website development costs are included in other assets for the year ended December 31, 2012. There were no capitalized website development costs at December 31, 2013 as website assets were divested during the quarter ended September 30, 2013.

During the year ended December 31, 2013, two key executives signed covenants not to compete. These covenants have a three-year life and have an estimated fair market value of $641,667 as of December 31, 2013.

At December 31, 2013, the Company had $2,964,424 of intangible assets of which $2,322,757 are attributed to TOT Group. As of December 31, 2012, the Company’s intangible assets prior to the acquisition of Unified Payments amounted to $111,670. Shown below are the details of intangible assets as of December 31, 2013 and 2012:

	Domain Name		IP Sofware		Portfolios		Client Acquisition Costs		Covenant Not to Compete		Capitalized Patent Cost		Website Capitalization Cost		Other		Total
Balance at January 1, 2012	$	6,787	$	-							$	34,801	$	75,875	$	2,500	$	119,963
Additions		66,964		-		-		-				7,150		53,769		-		127,883
Amortization		-		-		-		-				(4,032)		(129,644)		(2,500)		(136,176)
Balance at December 31, 2012	$	73,751	$	-	$	-	$	-	$	-	$	37,919	$	-	$	-	$	111,670
Additions		-		258,748		4,370,000		466,280		840,000		-		-		-		5,935,028
Amortization		-		(14,923)		(1,799,225)		(85,769)		(198,333)		(2,017)		-		-		(2,100,267)
Impairment		-		-		(872,354)		-		-		-		-		-		(872,354)
Divested		(73,751)		-		-		-		-		(35,902)		-		-		(109,653)
Balance at December 31, 2013	$	-	$	243,825	$	1,698,421	$	380,511	$	641,667	$	-	$	-	$	-	$	2,964,424

Amortization expense for the year ended December 31, 2013 was $2,100,267, and $136,176 for the year ended December 31, 2012.

The following table presents the estimated aggregate amortization expense of other intangible assets for the next five years ending December 31, 2014 - 2017.

2014	$	1,985,630
2015		643,332
2016		166,247
2017		56,405
Thereafter		112,810
Total	$	2,964,424

- 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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