License Fees

3 Months Ended

Jun. 30, 2020

PaymentOnCapitalLease

License Fees

Note 4.  License Fees

License fees consist of the following:

	June 30, 2020			December 31, 2019
Purchased licenses	$	367,410		$	377,160
Less accumulated amortization		(342,821	)		(341,155	)
License fees, net	$	24,589		$	36,005

Through May 31, 2020, licenses for gaming machine patents and technology had been added to the cost of slot machines built for sale or lease using a capitalization rate per machine. The capitalization rate was based on expected annual machine production and adjusted accordingly based on actual versus projected units produced. As of May 31, 2020, machine production for the remainder of the 2020 calendar year was projected to be nominal due to COVID-19. Therefore, the cost of licenses for gaming technology as of that date of $27,000 are being expensed as license fees on a straight-line basis at $6,750 per month over the remaining initial term of the license period ending September 30, 2020.

The weighted average useful life of purchased source code licenses is 3 years. Amortization expense included in the consolidated Statements of Operations relating to the source code licenses was $833 and $834 for the three months ended June 30, 2020 and 2019, respectively. Amortization expense included in the consolidated Statements of Operations relating to the purchased licenses was $1,666 for the six months ended June 30, 2020 and 2019, respectively.

Estimated future capitalizable costs, amortization and expense related to recorded license fees is as follows:

Year Ending December 31,		Amount
	2020	$	22,366
	2021		2,223
		$	24,589