INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

NOTE 4. INTANGIBLE ASSETS

Intangible assets are comprised of the following:

	September 30,		December 31,
	2015		2014
Developed technology	$	7,000,000	$	7,000,000
Customer contracts		6,400,000		6,400,000
Trademarks		1,500,000		1,500,000
		14,900,000		14,900,000
Accumulated amortization		(3,262,222)		(1,427,222)
	$	11,637,778	$	13,472,778

Amortization expense related to intangible assets for the three and nine months ended September 30, 2015, was $611,667 and $1,835,000, respectively.

Annually, and more often as necessary, we will perform an evaluation of our intangible assets and goodwill for indications of impairment. If indications exist, we will perform an evaluation of the fair value of the intangible assets and the goodwill and, if necessary, record an impairment charge. As of September 30, 2015, the Company performed an evaluation of the intangible assets and goodwill. As part of this evaluation we created a revenue and cost forecast for the next eight years taking into account the current and forecasted rig count and how that would affect our revenue. During Q3 the Company commercialized a new product called Strider. Adding this new revenue line alongside of our Drill-N-Ream tool and not adding the equivalent costs, as both tools can be marketed and sold to the same rigs. From this analysis we have determined no impairment was needed.