Annual report pursuant to section 13 and 15(d)

Other Intangible Assets

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Other Intangible Assets
12 Months Ended
Dec. 31, 2011
Other Intangible Assets [Abstract]  
Other Intangible Assets

4. OTHER INTANGIBLE ASSETS:

At December 31, 2011, the Company had the following intangible assets subject to amortization:

 

     December 31, 2011  
     Gross Carrying
Amount
     Accumulated
Amortization
    Net Carrying
Amount
 

Patents

   $ 1,286,437       $ (197,803   $ 1,088,634   

Trademarks

     908,998         (192,461     716,537   

Customer relationships

     1,010,000         (370,333     639,667   

Non-compete agreement

     60,000         (55,000     5,000   

Product certification and licensing costs

     158,024         (63,893     94,131   
  

 

 

    

 

 

   

 

 

 
   $ 3,423,459       $ (879,490   $ 2,543,969   
  

 

 

    

 

 

   

 

 

 

At December 31, 2010, the Company had the following intangible assets subject to amortization:

 

     December 31, 2010  
     Gross Carrying
Amount
     Accumulated
Amortization
    Net Carrying
Amount
 

Patents

   $ 1,233,701       $ (128,771   $ 1,104,930   

Trademarks

     907,998         (139,148     768,850   

Customer relationships

     1,010,000         (269,333     740,667   

Non-compete agreement

     60,000         (40,000     20,000   

Product certification and licensing costs

     130,956         (15,393     115,563   
  

 

 

    

 

 

   

 

 

 
   $ 3,342,655       $ (592,645   $ 2,750,010   
  

 

 

    

 

 

   

 

 

 

Patents and trademarks are amortized using the straight-line method over their useful lives of 17 years. Amortization expense on patents and trademarks was $122,798 and $118,394 for the years ended December 31, 2011 and 2010, respectively. Customer relationships are amortized using the straight-line method over their useful lives of 10 years. Amortization expense on customer relationships was $101,000 for both the years ended December 31, 2011 and 2010. Other intangible assets consist primarily of costs associated with product safety certifications (UL certifications), Energy Star certifications and non-compete agreements. Other intangible assets are amortized using the straight-line method over their useful lives, which range from 1-17 years and are periodically evaluated for recoverability in accordance with FASB ASC 350 "Intangibles – Goodwill and Other". Amortization expense on other intangible assets was $64,040 and $30,393 for the years ended December 31, 2011 and 2010, respectively. As of December 31, 2011, amortization expense on intangible assets for the next five years and thereafter is as follows, excluding $209,838 invested in patents which is not yet being amortized as the patent is not complete:

 

     2012      2013      2014      2015      2016      Thereafter      Totals  

Patents

   $ 70,902       $ 70,902       $ 70,902       $ 70,902       $ 70,902       $ 524,286       $ 878,796   

Trademarks

     53,471         53,471         53,471         53,471         53,471         449,182         716,537   

Customer relationships

     101,000         101,000         101,000         101,000         101,000         134,667         639,667   

Non-compete agreement

     5,000         —           —           —           —           —           5,000   

Product certification and licensing costs

     52,674         37,281         4,176         —           —           —           94,131   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Total    $283,047      $262,654      $229,549      $225,373      $225,373      $ 1,108,135      $ 2,334,131