INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2020

INTANGIBLE ASSETS

INTANGIBLE ASSETS

NOTE 5. – INTANGIBLE ASSETS

Our intangible assets at December 31, 2020 and December 31, 2019 consisted of the following:

	December 31,		December 31,
	2020		2019
Intangible assets, net
Patent and trademark costs	$	5,667	$	5,712
Less: accumulated amortization		(2,936)		(2,839)
Patent and trademark costs, net		2,731		2,873
License fees		3,876		3,777
Less: accumulated amortization		(948)		(709)
License fees, net		2,928		3,069
MSA signatory costs		2,202		2,202
License fee for predicate cigarette brand		350		350
	$	8,211	$	8,494

Amortization expense relating to the above intangible assets for the years ended December 31, 2020, 2019 and 2018 amounted to $658, $836, and $820, respectively. During years ended December 31, 2020 and 2019, the Company incurred an impairment related to patent intellectual property that would be expired prior to expected commercialization. Impairment expense the year ended December 31, 2020 amounted to $176 (cost of approximately $448 less accumulated amortization of approximately $302).

Impairment expense for the year ended December 31, 2019 amounted to $1,142 (cost of $2,092 less accumulated amortization of approximately $950) and related to tobacco intellectual property (patents, patent applications, and trademarks) that did not align to the Company’s very low nicotine strategic objectives.

The impairment charges are included as a separate line item in operating expenses on the Company’s Consolidated Statements of Operations and Comprehensive Loss. There was no impairment recorded during for the year ended December 31, 2018.

The estimated annual average amortization expense for the next five years is approximately $350 for patent costs and $244 for license fees.