5. INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2017

Intangible Assets

INTANGIBLE ASSETS

Patent

On September 29, 2009, the Company entered into an Asset Purchase Agreement (the “Agreement”), whereby the Company acquired a patent from in exchange for 500,000 shares of the Company’s common stock and the assumption of a legal fee payable in the amount of $47,595 which is related to the patent. Based on the guidance in ASC Topic No. 350-30, the patent was recorded as an intangible asset of $462,715, or approximately $.93 per share plus $47,595 for the assumed liability. The intangible asset is being amortized over an estimated ten-year useful life.

Software Implementation

In 2017, the Company put into service a business software. The costs to implement this software which totaled $41,980 are included in intangible assets and are being amortized over the initial term of the license which is three years.

The activity for the intangible assets is summarized below:

Cost	Patent		Software		Total
Balance at December 31, 2016	$	510,310	$	-	$	510,310
Implementation costs				41,980		41,980
Balance at December 31, 2017	$	510,310	$	41,980	$	552,290
Accumulated amortization
Balance at December 31, 2016	$	369,974	$	-	$	369,974
Amortization expense		51,032		13,993		65,025
Balance at December 31, 2017	$	421,006	$	13,993	$	434,999
Net carrying amount
Balance at December 31, 2016	$	140,336	$	-	$	140,336
Balance at December 31, 2017	$	89,304	$	27,987	$	117,291