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Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

3. INTANGIBLE ASSETS AND GOODWILL

The changes in the carrying amount of intangible assets for nine months ended September 30, 2015 were as follows:

Balance at December 31, 2014		$	3,307,797
Addition: Acquisition of patent			125,000
Deduction: Amortization expense			(701,460	)
Deduction: Disposal of trademarks			(64,819	)
Balance at September 30, 2015		$	2,666,518

The following summarizes amortization of intangible assets included in the statement of operations:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2015				2014				2015				2014
Cost of sales		$	59,163			$	59,163			$	288,898			$	242,354
General and administrative			138,090				28,785				412,562				96,688
		$	197,253			$	87,948			$	701,460			$	339,042

As a result of a decline in the Company’s stock price during the first three quarters of 2015, the Company concluded that this development was deemed a “triggering” event requiring that goodwill be tested for impairment as of September 30, 2015. The carrying amount of the Company’s goodwill was $8,101,661 as of September 30, 2015 and December 31, 2014. The Company performed the first step of the goodwill impairment test as of September 30, 2015 and June 30, 2015 in order to identify potential impairment by comparing its fair value to its carrying amount, including goodwill. The fair value was determined using certain valuation techniques, including a discounted cash flow analysis and an estimation of an implied control premium, in addition to the Company’s market capitalization on the measurement date. The implied control premium selected was developed based on certain observable market data of comparable companies. The market capitalization is sensitive to the volatility of the Company’s stock price. Based upon the first step of the goodwill impairment test performed as of September 30, 2015, the Company determined that the fair value was in excess of its carrying amount and therefore the second step of the goodwill impairment test was not required.

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- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef



-Publisher FASB



-Name Accounting Standards Codification



-Topic 350



-SubTopic 30



-Section 50



-Paragraph 3



-URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275



Reference 2: http://www.xbrl.org/2003/role/presentationRef



-Publisher FASB



-Name Accounting Standards Codification



-Topic 350



-SubTopic 30



-Section 50



-Paragraph 1



-URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275



Reference 3: http://www.xbrl.org/2003/role/presentationRef



-Publisher FASB



-Name Accounting Standards Codification



-Topic 350



-SubTopic 30



-Section 50



-Paragraph 2



-URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275



Reference 4: http://www.xbrl.org/2003/role/presentationRef



-Publisher FASB



-Name Accounting Standards Codification



-Topic 350



-SubTopic 20



-Section 50



-Paragraph 1



-URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267



Reference 5: http://www.xbrl.org/2003/role/presentationRef



-Publisher FASB



-Name Accounting Standards Codification



-Topic 350



-SubTopic 20



-Section 50



-Paragraph 2



-URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267

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