Data Storage Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 4 - Goodwill and Intangible Assets

Goodwill and intangible assets consisted of the following:

			December 31, 2017
	Estimated life in years		Gross amount		Accumulated Amortization

Goodwill		Indefinite	$	3,015,700		—
Intangible Assets
Intangible assets not subject to amortization Trademarks		Indefinite		294,268		—
Intangible assets subject to amortization Customer list		5 - 15		897,274		897,274
ABC Acquired contracts		5		310,000		72,333

SIAS Acquired contracts		5		660,000		154,000

Non-compete agreements		4		272,147		266,036

Total Intangible Assets				2,433,689		1,389,643

Total Goodwill and Intangible Assets			$	5,449,389	$	1,389,643

Scheduled amortization over the next five years as follows:

Years ending December 31,
2018		197,333
2019		196,778
2020		194,000
2021		161,667

Total	$	749,778

Amortization expense for the years ended December 31, 2017 and 2016 were $222,863 and $63,524 respectively.

Fair values are primarily determined through the use of inputs that are not observable from market-based information. Under ASC 805-10-25-13, management may adjust the fair values of acquired assets or assumed liabilities for a period of up to one year from the date of the acquisition to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have an effect on the measurement of the amounts recognized as of that date. During the fourth quarter of 2017 and within the measurement period, the Company made a net adjustment of $937,667 to the intangibles acquired from in the ABC acquisition which reduced the previous goodwill recorded from the transaction by $970,000 in 2016. The Company also recorded $32,333 in amortization for the same period in 2016. The effect of the change to 2016 increased the net loss by $32,333 and reduced retained deficit $32,333 and had no effect on loss per share.

- 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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