INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2012

INTANGIBLE ASSETS

INTANGIBLE ASSETS

NOTE 6 — INTANGIBLE ASSETS

Intangible assets represent the fair value assigned to definite-lived assets such as trade names and customer relationships as part of the Company’s acquisition of its Gearing subsidiary completed during 2007. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from 8 to 20 years. The Company tests intangible assets for impairment when events or circumstances indicate that the carrying value of these assets may not be recoverable. During the second quarter of 2012, the Company identified triggering events associated with the Company’s current period operating loss combined with its history of continued operating losses. As a result, the Company evaluated the recoverability of certain of its identifiable intangible assets. Based upon the Company’s assessment, the recoverable amount and the fair value were substantially in excess of the carrying amount of the intangible assets, and no impairment to these assets was indicated as of June 30, 2012. Despite having recoverable amounts substantially in excess of the total $8,784 carrying value of the intangible assets, the Company has concluded that it is appropriate to shorten the useful life associated with a $2,216 portion of the customer relationships intangible assets and amortize it over one year, instead of remaining five years previously assigned to this portion of the intangible assets.

As of June 30, 2012 and December 31, 2011, the cost basis, accumulated amortization, impairment charge and net book value of intangible assets were as follows:

	June 30, 2012									December 31, 2011
								Net									Net
	Cost		Accumulated			Impairment		Book		Cost		Accumulated			Impairment		Book
	Basis		Amortization			Charge		Value		Basis		Amortization			Charge		Value
Intangible assets:
Customer relationships	$	3,979	$	(1,313	)	$	—	$	2,666	$	3,979	$	(1,084	)	$	—	$	2,895
Trade names	7,999		(1,881		)	—		6,118		7,999		(1,680		)	—		6,319
Intangible assets	$	11,978	$	(3,194	)	$	—	$	8,784	$	11,978	$	(2,764	)	$	—	$	9,214