4. GOODWILL

 

The Company has recorded goodwill of $1,675,462 as described in Note 2. Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets. There were no changes in goodwill during the years ended December 31, 2015 or 2014.

 

The Company is required to perform an annual impairment test related to goodwill which is performed in the fourth quarter of each year, or sooner if changes in circumstances suggest that the carrying value of an asset may not be recoverable. Due to the decline in our stock price during the fourth quarter, we experienced a significant decrease in the excess market capitalization over carrying value of the Company. As a result, we performed certain procedures to ensure that the quoted value of our stock was representative of the fair value. We reviewed the recent volume of trading, who was trading, price trends of industry peers, actual industry control premiums, and other factors. Through this analysis we concluded that the quoted value was reflective of the fair value of our stock and that the market capitalization was reliable for purposes of this test. Our analysis concluded that as of December 31, 2015, goodwill was not impaired.