Annual report pursuant to Section 13 and 15(d)

INTANGIBLE ASSETS

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INTANGIBLE ASSETS
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Note 7. INTANGIBLE ASSETS

Intangible assets as of December 31, 2016 and 2015 consisted of the following:

 

          December 31, 2016     December 31, 2015  
    Estimated Useful Life in Years     Gross Carrying Amount     Accumulated Amortization    

Net

Carrying Value

     Gross Carrying Amount     Accumulated Amortization     Net Carrying Value  
                                           
Amortized Intangible Assets:                                          
Customer Relationships   5 to 12     $ 8,960,700     $ (780,960 )   $ 8,179,740     $ 212,400     $ (113,988 )   $ 98,412  
Trade Brands   2 to 8       495,520       (89,907 )     405,613       20,520       –       20,520  
Dispensary License   14       10,270,000       (550,179 )     9,719,821       –       –       –  
Patent   2       3,078       (1,154 )     1,924       –       –       –  
                                                       
Total Amortized Intangible Assets           19,729,298       (1,422,200 )     18,307,098       232,920       (113,988 )     118,932  
                                                       
Unamortized Intangible Assets:                                                      
Trade Name   Indefinite       5,320,000       –       5,320,000       –       –       –  
                                                       
Total Unamortized Intangible Assets           5,320,000       –       5,320,000       –       –       –  
                                                       
Total Intangible Assets         $ 25,049,298     $ (1,422,200 )   $ 23,627,098     $ 232,920     $ (113,988 )   $ 118,932  

  

Intangible assets with finite lives are amortized over their estimated useful lives. We recorded amortization expense of $1,308,212, $42,480 and $42,480 for the years ended December 31, 2016, 2015 and 2014, respectively. Based solely on the amortizable intangible assets recorded at December 31, 2016, we estimate amortization expense for the next five years to be as follows:

 

Year Ending      
December 31,   Amount  
       
2017   $ 1,718,104  
2018     1,668,789  
2019     1,645,582  
2020     1,626,231  
2021     1,460,486  
Thereafter     10,187,906  
    $ 18,307,098  

 

Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, changes in useful lives or other relevant factors or changes.