Annual report pursuant to Section 13 and 15(d)

INTANGIBLE ASSETS

v3.3.1.900
INTANGIBLE ASSETS
12 Months Ended
Dec. 31, 2015
INTANGIBLE ASSETS  
INTANGIBLE ASSETS

NOTE 5 — INTANGIBLE ASSETS

 

Intangible assets include patents purchased and patents acquired in lieu of cash in licensing transactions. Patents purchased are recorded based at their acquisition cost and patents acquired in lieu of cash are recorded at their fair market value. Intangible assets consisted of the following:

 

 

 

December 31, 2015

 

December 31, 2014

 

Intangible Assets

 

$

41,014,992

 

$

49,914,360

 

Accumulated Amortization & Impairment

 

(15,557,353

)

(6,550,528

)

 

 

 

 

 

 

Intangible assets, net

 

$

25,457,639

 

$

43,363,832

 

 

 

 

 

 

 

 

 

 

Intangible assets are comprised of patents with estimated useful lives between approximately 1 to 13 years. Once placed in service, the Company amortizes the costs of intangible assets over their estimated useful lives on a straight-line basis. Costs incurred to acquire patents, including legal costs, are also capitalized as long-lived assets and amortized on a straight-line basis with the associated patent. Amortization of patents is included as an operating expense as reflected in the accompanying consolidated statements of operations. The Company assesses fair market value for any impairment to the carrying values.  Management concluded that there was impairment to the carrying value in the amount of $5,793,409 for the year ended December 31, 2015 and no impairment for the year ended December 31, 2014.

 

Amortization and depreciation expense for the years ended December 31, 2015 and 2014 was $10,825,164 and $5,528,280, respectively.  Future amortization of current intangible assets, net is as follows:

 

2016

 

$

7,495,068 

 

2017

 

5,312,559 

 

2018

 

3,715,236 

 

2019

 

2,879,831 

 

2020

 

2,143,028 

 

2021 and thereafter

 

3,911,917 

 

 

 

 

 

Total

 

$

25,457,639 

 

 

 

 

 

 

 

Since November 2012, the Company has continued to add to its intangible assets, through either the purchase of intangible asset directly or purchasing entities holding intangible assets. During the years ended December 31, 2015 and December 31, 2014, the Company made the following intangible asset acquisitions:

 

·

In May 2014, we acquired ownership rights of Dynamic Advances, LLC, a Texas limited liability company, IP Liquidity Ventures, LLC, a Delaware limited liability company, and Sarif Biomedical, LLC, a Delaware limited liability company, all of which hold patent portfolios or contract rights to the revenue generated from the patent portfolios;

·

In June 2014, we acquired Selene Communication Technologies, LLC, which holds multiple patents in the search and network intrusion field;

·

In August 2014, we acquired patents from Clouding IP LLC, with such patents related to network and data management technology;

·

In September 2014, we acquired TLI Communications, which owns a single patent in the telecommunication field;

·

In October 2014, we acquired three patent portfolios from MedTech Development, LLC, which owns medical technology patents; and

·

In April 2015, we purchased 43 patents from Bridgestone Americas Tire Operations LLC (“BATO”), with such patents related to automobile tire pressure monitoring systems, with such purchase terminated and reversed on November 15, 2015.