Intangible Assets

12 Months Ended

Jun. 30, 2017

Finite-Lived Intangible Assets [Line Items]

Goodwill, Trademarks and Trade Names

Goodwill, trademarks and trade names represent intangible assets obtained from EOI, Endologix and Sonomed acquisitions. Goodwill represents the excess of purchase price over the fair value of net assets acquired.

The Company adopted FASB authoritative guidance effective July 1, 2001 for goodwill and identified intangible assets that have indefinite lives. These assets are no longer amortized but reviewed for impairment annually or more frequently if certain indicators arise.

In accordance with authoritative guidance effective July 1, 2001, the Company discontinued the amortization of goodwill and identifiable intangible assets that have indefinite lives. Intangible assets that have finite lives continue to be amortized over their estimated useful lives. Management has evaluated the carrying value of goodwill and its identifiable intangible assets that have indefinite lives during each of the fiscal years subsequent to July 1, 2001, utilizing discounted cash flows of the respective business units. In accordance with ASC 350-20, these intangible assets will continue to be assessed on an annual basis, and impairment, if any, would be recorded as a charge against income from operations.

The authoritative guidance makes use of the concept of reporting units. All acquisitions must be assigned to a reporting segment or unit. Reporting units have been defined under the standards to be the same as or one level below an operating segment, as defined by FASB issued authoritative guidance related to disclosures about segments of an enterprise and related information.

The Company tests goodwill for possible impairment on an annual basis at June 30, and at any other time events occur or circumstances indicate that the carrying amount of goodwill may be impaired. As a result of the Company's testing during the year ended June 30, 2017, the goodwill carrying amount of $125,027 was deemed impaired and written off . During the year ended June 30, 2016, no impairments were recorded.

The following tables present unamortized intangible assets as of June 30, 2017 and 2016:



	2017 Net Carrying Amount		2016 Net Carrying Amount
Goodwill
Sonomed-Escalon	$	—	$	125,027
Total	$	—	$	125,027



	2017 Net Carrying Amount		2016 Net Carrying Amount
Trademarks and trade names
Sonomed-Escalon	$	605,006	$	605,006
Total	$	605,006	$	605,006

Patents

It is the Company’s practice to seek patent protection on processes and products in various countries. Patent application costs are capitalized and amortized over their estimated useful lives, not exceeding 17 years, on a straight-line basis from the date the related patents are issued. Costs associated with patents no longer being pursued are expensed. Accumulated amortization on patents from continuing operations was approximately $91,000 and $89,000 at June 30, 2017 and 2016, respectively. Amortization expense for the years ended June 30, 2017 and 2016 was approximately $2,000 and $1,000, respectively.

Amortization expense, relating entirely to patents, is estimated to be approximately $1,000 related to patents in 2018.

The following table presents amortized intangible assets as of June 30, 2017:



	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Amortized Intangible Assets Patents
Sonomed-Escalon	$	90,962	$	—	$	90,962	$	(90,562	)	$	400
Total	$	90,962	$	—	$	90,962	$	(90,562	)	$	400

The following table presents amortized intangible assets as of June 30, 2016:



	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Amortized Intangible Assets Patents
Sonomed-Escalon	$	90,962	$	—	$	90,962	$	(88,962	)	$	2,000
Total	$	90,962	$	—	$	90,962	$	(88,962	)	$	2,000

Licenses

The Company purchased new licenses of $8,000 and$176,000 for year end June 30, 2017 and 2016, respectively and the cost is capitalized and amortized over 10 years. Amortization expense is $18,000 for the year ended June 30, 2017. No amortization occurred during year ended June 30, 2016.

Annual amortization related entirely to licenses is estimated to be approximately $18,000 for the year ending June 30, 2018, 2019, 2020, 2021 and 2022.

The following table presents amortized licenses as of June 30, 2017:



	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Amortized Intangible Assets Licenses
Sonomed-Escalon	$	186,500	$	—	$	186,500	$	(18,000	)	$	168,500
Total	$	186,500	$	—	$	186,500	$	(18,000	)	$	168,500

The following table presents amortized licenses as of June 30, 2016:



	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized Intangible Assets Licenses
Sonomed-Escalon	$	176,000	$	—	$	176,000	$	—	$	176,000
Total	$	176,000	$	—	$	176,000	$	—	$	176,000

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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