Intangible Assets

12 Months Ended

Dec. 31, 2013

6. INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31, 2013 and 2012:



	2013
	Gross Carrying Amount		Accumulated Amortization		Net Value
Patents and copyrights	$	18,943,020	$	10,397,136	$	8,545,884
Prepaid licensing fees		574,000		567,452		6,548
	$	19,517,020	$	10,964,588	$	8,552,432

	2012
	Gross Carrying Amount		Accumulated Amortization		Net Value
Patents and copyrights	$	18,290,991	$	9,329,438	$	8,961,553
Prepaid licensing fees		574,000		557,452		16,548
	$	18,864,991	$	9,886,890	$	8,978,101

Periodically, we evaluate the recoverability of our intangible assets and take into account events or circumstances that may warrant revised estimates of useful lives or that may indicate impairment exists (“Triggering Event”). Based on our cumulative net losses and negative cash flows from operations to date, we assess our working capital needs on an annual basis. This annual assessment of our working capital is considered to be a Triggering Event for purposes of evaluating the recoverability of our intangible assets. As a result of our evaluation at December 31, 2013, we determined that no impairment exists with regard to our intangible assets.

Patent costs represent legal and filing costs incurred to obtain patents and trademarks for product concepts and methodologies that we have developed. Capitalized patent costs are amortized over the estimated lives of the related patents, ranging from fifteen to twenty years. Prepaid licensing fees represent costs incurred to obtain licenses for use of certain technologies in future products. Prepaid license fees are amortized over their estimated economic lives, generally two to five years.

Amortization expense for the years ended December 31, 2013, 2012, and 2011 is as follows:



		Amortization Expense
	Weighted average estimated life (in years)
		2013		2012		2011

Patents and copyrights	17	$	1,067,698	$	1,049,446	$	1,013,681
Prepaid licensing fees	2		10,000		3,452		0
Total amortization		$	1,077,698	$	1,052,898	$	1,013,681

Future estimated amortization expense for intangible assets that have remaining unamortized amounts as of December 31, 2013 are as follows:



2014	$	1,054,955
2015		953,970
2016		917,996
2017		915,396
2018		859,572
2019 and thereafter		3,850,543
Total	$	8,552,432