|3 Months Ended|
Mar. 31, 2017
NOTE 4 – 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:
Intangible assets are comprised of patents with estimated useful lives between approximately 1 to 16 years. Once placed in service, the Company will amortize the costs of intangible assets over their estimated useful lives on a straight-line basis. During the three months ended March 31, 2017 and 2016, respectively, the Company capitalized a total of $0 and $0 in patent acquisition costs. 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 condensed statements of operations. The Company assesses fair market value for any impairment to the carrying values. Management concluded that there was no impairment to the carrying value for the three months ended March 31, 2017, compared to an impairment to the carrying value in the amount of $373,195 for the three months ended March 31, 2016. The Company determined the fair value using a Level 3 fair value category of unobservable inputs and concluded that the fair value on these intangibles was zero.
Patent amortization expense for the three months ended March 31, 2017 and March 31, 2016 was $705,958 and $2,025,899, respectively, net of foreign currency translation adjustments. Future amortization of intangible assets, net of foreign currency translation adjustments is as follows:
As of March 31, 2017, our operating subsidiaries owned 345 patents, as set forth below, and had economic rights to over 10,000 additional patents, both of which include U.S. patents and certain foreign counterparts, covering technologies used in a wide variety of industries. In the aggregate, the earliest date for expiration of a patent in the Company’s patent portfolio has passed (the patent is expired, but patent rules allow for six-year look-back for royalties), the median expiration date for patents in the Company’s portfolio is August 28, 2020, and the latest expiration date for a patent in any of the Company’s patent portfolios is July 29, 2033. A summary of the Company’s patent portfolios is as follows:
The entire disclosure for all or part of the information related to intangible assets.
Reference 1: http://www.xbrl.org/2003/role/presentationRef