Annual report pursuant to Section 13 and 15(d)

INTANGIBLE ASSETS

v2.4.1.9
INTANGIBLE ASSETS
 12 Months Ended
Dec. 31, 2014
Goodwill And Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS

NOTE 8. INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31, 2014 and 2013:

 

 

 

2014

 

 

2013

 

Patents

 

$

12,866,217

 

 

$

13,615,967

 

Customer relationships

 

 

3,400,000

 

 

 

3,400,000

 

Trademarks

 

 

2,740,000

 

 

 

2,740,000

 

Non-compete agreements

 

 

660,000

 

 

 

660,000

 

License agreements

 

 

35,000

 

 

 

—

 

 

 

 

19,701,217

 

 

 

20,415,967

 

Less: accumulated amortization

 

 

(4,944,569

)

 

 

(3,604,456

)

Intangible assets, net

 

$

14,756,648

 

 

$

16,811,511

 

 

Included in amortization expense was $1,561,631 and $1,588,905 related to the above intangible assets for the years ended December 31, 2014 and 2013, respectively.

In 2014, we recognized an impairment charge of $528,233 relating to patents purchased in 2011 from PTG.  We determined these patents to be adversely limiting in scope and nature and have a carrying value in excess of their fair value.  As of December 2014, we abandoned our maintenance of the patents and reduced the carrying value to zero.

In 2013, we recognized an impairment charge of $150,000 relating to territory rights, which were the result of a 2008 purchase from an outside sales representative to sell and distribute in the State of California. As of September 2013, we discontinued our business relationship with tribal casinos in California as a result of a notice received from the California Bureau of Gambling Control. See Note 12 for details regarding the California administrative action.