Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2014

Notes to Financial Statements

4. Goodwill and Intangible Assets

Acquisition of North South

As disclosed in Note 1, on September 10, 2013, the Company completed its acquisition of North South.  The Company acquired North South to expand its patent portfolio and continue its business plan of the monetization of its intellectual property.  The Company accounted for its acquisition of North South using the acquisition method of accounting.

The following table presents the unaudited pro-forma financial results, as if the acquisition of North South had been completed as of January 1, 2013 (in thousands, except per share amounts):

	For the three months ended
	March 31, 2013
Revenues	$	53
Net loss	$	(3,810	)
Loss per share - basic and diluted	$	(5.51	)

The unaudited pro-forma results of operations are presented for information purposes only. The unaudited pro-forma results of operations are not intended to present actual results that would have been attained had the acquisition been completed as of January 1, 2013 or to project potential operating results as of any future date or for any future periods.

Other Intangible Assets

The Company’s only identifiable intangible assets are patents and patent rights, with estimated remaining economic useful lives ranging from 6 months to 12 years. For all periods presented, all of the Company’s identifiable intangible assets were subject to amortization. The gross carrying amounts and accumulated amortization related to acquired intangible assets as of March 31, 2014 are as follows (in thousands, except year amounts):

Date Acquired and Description	Intangible Assets at December 31, 2013, net		Weighted Average Life (in years)		Amortization Expense for the Three Months Ended March 31, 2014		Amount Recorded as of March 31, 2014, net
7/24/13 - Rockstar patent portfolio	$	3,792		8.50	$	115	$	3,677
9/10/13 - North South patent portfolio		1,062		8.50		32		1,030
12/31/13 - Rockstar patent portfolio		59,981		6.50		2,281		57,700
	$	64,835			$	2,428	$	62,407

The weighted average remaining amortization period of the Company’s patents is approximately 6.4 years. Amortization for the year ended 2013, three months ended March 31, 2014 and future amortization of all patents is as follows (in thousands):

	Rockstar		North South		Rockstar
	Portfolio		Portfolio		Portfolio
	Acquired		Acquired		Acquired		Total
	July 24, 2013		September 10, 2013		December 13, 2013		Amortization
Nine Months Ended December 31, 2014		355		98		6,950		7,403
December 31, 2015		470		130		9,225		9,825
December 31, 2016		471		130		9,250		9,851
December 31, 2017		470		130		9,225		9,825
December 31, 2018		470		130		9,225		9,825
Thereafter		1,441		412		13,825		15,678
Total	$	3,677	$	1,030	$	57,700	$	62,407