NOTE 6 – INTANGIBLE ASSETS

The Company’s intangible assets consist of patents and patents pending acquired from third parties, and are recorded at cost. The Company amortizes the costs of its intangible assets over their estimated useful lives unless such lives of approximately 11 years. Patents pending are not amortized unless and until the patents are issued. Amortizable intangible assets are tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested for impairment, at least annually, and written down to fair value as required.

The Company’s intangible assets, net of accumulated amortization consisted of the following:

Patents and/or software licenses, net	June 30, 2017			December 31, 2016
Cost	$	697,955		$	697,955
Amortization		(412,350	)		(388,594	)
Net intangible assets	$	285,605		$	309,361

The Surface Modification Technologies assets include a patent, a patent pending, trade secret technology, instructions, manuals and materials on certain manufacturing processes and know-how. For the six months ended June 30, 2017 and 2016, the Company recorded amortization expense of $23,756 and $23,756, respectively. See Note 1.