Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2013

8. Intangible Assets and Goodwill

In connection with the acquisition of Anika S.r.l., the Company acquired various intangible assets and goodwill. The Company evaluated the various intangibles and related cash flows from these intangible assets, as well as the useful lives and amortization methods related to these intangibles. The in-process research and development intangible assets initially have indefinite lives and are reviewed periodically to assess the project status, valuation, and disposition including write-off(s) for abandoned projects. Until such determination is made, they are not amortized.

The Company reviews its long-lived assets for impairment at least annually. Additionally, the Company will initiate a review for impairment if events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of the assets are no longer appropriate. Each impairment test will be based on a comparison of the undiscounted cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.

Intangible assets as of June 30, 2013 and December 31, 2012 consist of the following:

			June 30, 2013								December 31, 2012
	Gross Value		Currency Translation Adjustment			Accumulated Amortization			Net Book Value		Net Book Value		Useful Life
Developed technology	$	16,700,000	$	(1,609,247	)	$	(3,472,667	)	$	11,618,086	$	12,370,042	15
In-process research & development		5,502,686		(512,634	)		-			4,990,052		4,980,574	Indefinite
Distributor relationships		4,700,000		(483,620	)		(2,972,514	)		1,243,866		1,733,453	5
Patents		1,000,000		(96,203	)		(197,640	)		706,157		749,166	16
Elevess trade name		1,000,000		-			(561,275	)		438,725		501,401	9
Total	$	28,902,686	$	(2,701,704	)	$	(7,204,096	)	$	18,996,886	$	20,334,636

The aggregate amortization expense related to intangible assets was $514,425 and $506,706 for the three months ended June 30, 2013 and 2012, respectively. The aggregate amortization expense for the six months ended June 30, 2013 and 2012, was $1,034,408 and $1,022,984, respectively.

Changes in the carrying value of goodwill for the three and six months ended June 30, 2013 were as follows:

	For the three months ended:		For the six months ended:
	June 30,		June 30,
	2013		2013

Balance, beginning	$	8,792,165	$	9,065,891
Effect of foreign currency adjustments		131,032		(142,694	)
Balance, ending	$	8,923,197	$	8,923,197

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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