Quarterly report pursuant to sections 13 or 15(d)

INTELLECTUAL PROPERTY AND INTANGIBLE ASSETS

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INTELLECTUAL PROPERTY AND INTANGIBLE ASSETS
 9 Months Ended
Sep. 30, 2013
Notes to Financial Statements  
INTELLECTUAL PROPERTY AND INTANGIBLE ASSETS

Intellectual property and intangible assets consisted of the following at:

 

  September 30, 2013   December 31, 2012
Intellectual property $ 16,355,967     $ 16,355,967  
Customer relationships   3,400,000       3,400,000  
Non-compete   660,000       660,000  
Territory rights   —       150,000  
    20,415,967       20,565,967  
Less: Accumulated amortization   (3,207,229 )     (2,015,551 )
  $ 17,208,738     $ 18,550,416  

 

Amortization expense was $1,191,678 and $1,179,521 for the nine months ended September 30, 2013 and 2012, respectively.

 

Included in intangible assets at December 31, 2012 are territory rights of $150,000, which are the result of a 2008 purchase from an outside sales representative to sell and distribute in the State of California. At September 30, 2013, we recorded an impairment of $150,000 to the territory rights. See Note 11.

 

In October 2011, we acquired the following intangible assets related to the asset purchase with Prime Table Games:

 

  Fair Value
Patents $ 13,259,000  
Customer relationships   3,400,000  
Trademarks   2,740,000  
Goodwill   1,091,000  
Non-compete agreement   660,000  
Total $ 21,150,000