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Intangible Assets

9 Months Ended

Sep. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

5. Intangible Assets

Intangible assets are comprised of the following:

		September 30, 2018						December 31, 2017
	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount

Acquired intangibles - customer lists and non-compete agreements	5-10 years		2,301,300		1,900,658		400,642		1,997,300		1,810,750		186,550
Acquired intangibles - patents and patent rights			500,000		500,000		-		3,155,000		2,603,942		551,058
Patent application costs	Varied ⁽¹⁾		1,168,155		726,412		441,743		1,148,017		664,873		483,144
		$	3,969,455	$	3,127,070	$	842,385	$	6,300,317	$	5,079,565	$	1,220,752

⁽¹⁾

Patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent. As of September 30, 2018, the weighted average remaining useful life of these assets in service was approximately 7 years.

Intangible asset amortization expense for the nine months ended September 30, 2018 amounted to $407,034 ($513,881- September 30, 2017).

On June 26, 2018, the Company entered into an agreement with Fortress Credit Co LLC (“Fortress”), which among other things transferred to Fortress all of the remaining economic rights to certain of the Company’s semi-conductor related patents (See Note 6). As a result, the Company wrote-off these patents which had an aggregated gross cost of $2,655,000 and a net unamortized carrying amount of $295,470 on the agreement date.

On July 31, 2018, the Company entered into a Non-Compete Letter Agreement (the “Agreement”) with its former President and Chief Executive Officer of its wholly owned subsidiary, Premier Packaging Corporation, . The Agreement called for payments of $16,000 per month, for a period of 19 months, as consideration for the two-year non-competition and non-solicitation restrictive covenants. The Company recorded the aggregate cost of the Agreement of $304,000 as an intangible asset to be amortized over the 24-month period commencing August 1, 2018.