Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2014

Notes to Financial Statements

4. Goodwill and Intangible Assets

Acquisition of North South

On September 10, 2013, the Company completed its acquisition of North South.  The Company acquired North South to expand its patent portfolio and continue its business plan of the monetization of its intellectual property.  The Company accounted for its acquisition of North South using the acquisition method of accounting.

The following table presents the unaudited pro-forma financial results, as if the acquisition of North South had been completed as of January 1, 2013 (in thousands, except per share amounts):

	For the three months ended			For the six months ended
	June 30, 2013			June 30, 2013
Revenues	$	47		$	100
Net loss	$	(919	)		(4,729	)
Loss per share - basic and diluted	$	(1.30	)		(6.76	)

The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the acquisition been completed as of January 1, 2013 or to project potential operating results as of any future date or for any future periods.

Other Intangible Assets

The Company’s intangible assets with finite lives consist of its patents and patent rights, with estimated remaining economic useful lives ranging from six months to 12 years. For all periods presented, all of the Company’s identifiable intangible assets were subject to amortization. The gross carrying amounts and accumulated amortization related to acquired intangible assets as of June 30, 2014 are as follows (in thousands, except year amounts):

Date Acquired and Description	Patent Portfolios at December 31, 2013, Net		Weighted Average Life (in years)		Amortization Expense for the Six Months Ended June 30, 2014		Patent Portfolios at June 30, 2014, Net
7/24/13 - Rockstar patent portfolio	$	3,792		8.50	$	232	$	3,560
9/10/13 - North South patent portfolio		1,062		8.50		65		997
12/31/13 - Rockstar patent portfolio		59,981		6.50		4,581		55,400
	$	64,835			$	4,878	$	59,957

The Company incurred amortization expense associated with its finite-lived intangible assets of $2.45 and $4.88 million for the three and six months ended June 30, 2014, respectively.

The weighted average remaining amortization period of the Company’s patents is approximately 6.1 years. Future amortization of all patents is as follows (in thousands):

	Rockstar		North South		Rockstar
	Portfolio		Portfolio		Portfolio
	Acquired		Acquired		Acquired		Total
	24-Jul-13		10-Sep-13		31-Dec-13		Amortization
Six Months Ended December 31, 2014		237		65		4,650		4,953
Year Ended December 31, 2015		470		130		9,225		9,825
Year Ended December 31, 2016		471		130		9,250		9,851
Year Ended December 31, 2017		470		130		9,225		9,825
Year Ended December 31, 2018		470		130		9,225		9,825
Thereafter		1,441		412		13,825		15,678
Total	$	3,559	$	997	$	55,400	$	59,957