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Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 7 - INTANGIBLE ASSETS

During 2019 and 2018, the Company spent approximately $10,000 and $20,000, respectively, on capitalized patent application costs.

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 8). 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.

On October 24, 2018, the Company’s subsidiary, DSS Asia Limited acquired Guangzhou Hotapps Technology Ltd., (“Guangzhou Hotapps”) a Chinese company, in exchange for a 2-year, $100,000 unsecured promissory note. In connection with this acquisition, the Company acquired the license to do business in China to which the Company allocated a value of $85,734 as well as a related deferred tax liability of $33,333 due to outside basis differences and recorded as an intangible asset that it will amortize over a five-year period.

On March 5, 2019, the Company paid $350,000 and issued 130,435 shares of the Company’s common stock valued at $144,783 in conjunction with the signing of a Master Distributor Agreement with Advanced Cyber Security Corp. (“ACS”) for the Company to distribute ACS’s EndpointLockV™ cyber security software exclusively in thirteen countries in Asia and Australia, and non-exclusively, in the U.S. and Middle East. The aggregate cost of $494,783 of the agreement was recorded as an intangible asset to be amortized over the expected useful life of 36 months.

Intangible assets are comprised of the following:

		2019						2018
	Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Acquired intangibles customer lists, licenses and non-compete agreements	2-10 years		1,788,699		1,202,832		585,867		1,284,065		823,884		460,181
Acquired intangibles patents and patent rights			500,000		500,000		-		500,000		500,000		-
Patent application costs	Varied (1)		1,178,176		829,278		348,898		1,168,155		746,925		421,230
			3,466,875		2,532,110		934,765		2,952,220		2,070,809		881,411

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Patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent. As of December 31, 2019, the weighted average remaining useful life of these assets in service was approximately 6.9 years.

Amortization expense for the year ended December 31, 2019 amounted to approximately $461,000 ($487,000 –2018).

Expected amortization for each of the five succeeding fiscal years is as follows:

Year	Amount
2020		383,276
2021		273,626
2022		127,408
2023		39,378
2024		19,112