Annual report pursuant to Section 13 and 15(d)

Patents and Other Intangible Assets

v3.21.1
Patents and Other Intangible Assets
12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Patents and Other Intangible Assets Patents and Other Intangible Assets
Patents and other intangible assets consist of the following at December 31, 2020 and 2019 (in thousands):

2020 2019
Patents $   $ 981 
Customer list   2,738 
Trade name   477 
  4,196 
Less accumulated amortization   (1,301)
Net patent and other intangible assets $   $ 2,895 
The Company holds several patents that are considered intangible assets and are subject to amortization. During the 4th quarter of 2020 management reviewed the Company’s patent portfolio and determined that four of the patents ("New Jersey patents") are related to business areas that will no longer be pursued by the Company. In addition, a fifth patent known as the TOO patent was similarly identified and determined that it would be held for sale. The Company wrote off the net book value of the New Jersey patents in the amount of $71 thousand and recorded a contra asset of $50 thousand as an estimate to prepare the TOO asset for sale. The book value of the TOO patent held for sale was $156 thousand for the year ended December 31, 2020 and is recorded as a current asset.
The customer list and trade name in the table above include foreign currency translation adjustments that were de minimis during the years ended December 31, 2020 and 2019. Other intangible assets consisted of vivoPharm’s customer list and trade name, which historically were amortized using the straight-line method over the estimated useful lives of the assets of ten years. FASB Accounting Standards Codification (ASC) Topic 360, “Property, Plant, and Equipment,” provides guidance for the impairment of long-lived assets that are classified as held and used. In particular, the relevant guidance is included in the “Impairment or Disposal of Long-Lived Asset” subsections of ASC 360-10. Long-lived assets are required to be tested for impairment if events or changes in circumstances indicate the carrying amount of the asset group to which they belong may not be recoverable. If the carrying amount of the asset group is not recoverable, an impairment loss is measured based on the excess of the carrying amount of the asset group over the fair value of the asset group. VivoPharm experienced an operating loss of approximately $1.5 million for the 12 months ended December 31, 2020 which was determined to be an indicator of impairment. Based upon the actual results for the first two months of the 2021 fiscal year, the Company updated the forecasted operating results for the period from 2021 through 2026, the amortization period of the Company’s intangible assets and determine that the fair value of the intangible assets which was calculated using the present value of future cashflows, did not support its carrying value resulting in an impairment charge of $2.1 million, which was recorded in operating expenses for the year ended December 31, 2020.

Amortization expense recognized during the years ended December 31, 2020 and 2019 was $462 thousand and $454 thousand, respectively.