Note 3 - Intangible Assets

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

3. INTANGIBLE ASSETS

Intangible assets, net, consisted of the following:

	December 31,
	2022			2021
Core Technology	$	8,567,448		$	8,567,448
Patents and trademarks		995,627			994,951
		9,563,075			9,562,399
Less: accumulated amortization		(9,404,266	)		(9,368,199	)
	$	158,809		$	194,200

The changes in the carrying amount of intangible assets during the years ended December 31, 2022 and 2021 were as follows:

Balance as of January 1, 2021	$	212,619
Additions during the period		11,941
Amortization		(30,360	)
Balance as of December 31, 2021		194,200
Additions during the period		676
Amortization		(36,067	)
Balance as of December 31, 2022	$	158,809

Andrea accounts for its intangible assets in accordance with ASC 360 “Property, Plant and Equipment” for purposes of determining and measuring impairment. Andrea’s policy is to periodically review the value assigned to its intangible assets to determine if they have been permanently impaired by adverse conditions which may affect Andrea. If Andrea identifies a permanent impairment such that the carrying amount of Andrea’s intangible assets are not recoverable using the sum of an undiscounted cash flow projection (gross margin dollars from product revenues), a new cost basis for the impaired asset will be established. If required, an impairment charge is recorded based on an estimate of future discounted cash flows.  This new cost basis will be net of any recorded impairment. At December 31, 2022 and 2021, as a result of operating losses, Andrea compared the sum of undiscounted cash flow projections (gross margin dollars from product sales) to the carrying value and Andrea concluded that there were no intangible assets that were impaired.  The weighted average remaining amortization period at December 31, 2022 is 5.8 years.

Amortization expense was $36,067 and $30,360 for the years ended December 31, 2022 and 2021, respectively. Patents and trademarks, once issued are amortized on a straight-line basis over periods ranging from 10 to 20 years. Assuming no changes in the Company's intangible assets, estimated amortization expense for each of the five succeeding fiscal years ending December 31 is expected to be approximately $31,000, $31,000, $22,000, $22,000 and $22,000, respectively.