Annual report pursuant to Section 13 and 15(d)

Acquisition

v2.4.0.6
Acquisition
 12 Months Ended
Dec. 31, 2012
Acquisition [Abstract]  
Acquisition
Note 11 - Acquisition
 
On October 31, 2012, our wholly owned subsidiary DSC, a Delaware corporation (“Data Storage DE”) and Message Logic, INC, a Delaware Corporation (“MessageLogic”) entered into an Asset Purchase Agreement (the “Agreement”); setting forth the acquisition of MessageLogic’s assets. Data Storage DE and its parent Data Storage Corporation is hereinafter referred to as the “Company” or “Data Storage.”
 
As described above, on October 31, 2012, MessageLogic agreed to sell, transfer, assign, and deliver to the Company all right, title and interest in the end user customer base, software and source code of MessageLogic (the “Business”) and all related current and fixed assets and contracts related to the Business.  These assets include, but not limited to, all of MessageLogic’s intellectual property, customers, customer contracts, software and other assets (collectively, but excluding the Excluded Assets (as hereinafter defined), the Message Logic Assets).  Additionally, MessageLogic transferred to the Company their current liabilities to the extent arising out of the business or the assets totaling $102,109.
 
Pursuant to the Agreement, the Company paid $211,003 through the issuance of 725,960 shares of its common stock and the assumption of $102,109 of MessageLogic’s liabilities.  The contingent purchase price provides for up to $800,000 in cash and an additional 769,230 of Data Storage common stock.
 
The following sets forth the components of the purchase price:
 
Purchase price:
      
Stock issued to seller at closing
  
$
80,764
  
Stock issued to creditor of seller at closing
    
28,130
  
Assumption of liabilities of seller
    
102,109
  
Contingent purchase price
    
368,624
  
Total purchase price
    
579,627
  
         
Assets acquired:
        
Trade Name/Trade Mark
    
15,000
  
Customer Agreements
    
153,175
  
Software and Source Code
    
406,581
  
Fixed Assets
    
4,870
  
Security Deposits
    
0
  
Total assets acquired
   $
579,627
  
         
Liabilities assumed:
        
Accounts payable
   $
23,051
  
Prepaid Revenue
    
0
  
Deferred Revenue
    
79,058
  
Total liabilities assumed
    
102,109
  
         
Net assets acquired
    
477,518
  
         
Excess purchase price
  
$
-
  
  
The intangible assets subject to amortization have been assigned useful lives as follows:
 
Customer list
5 years
Non-compete agreements
4 years