Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Note 5: Intangible Assets and Goodwill

The Company’s intangible assets at September 30, 2016, consisted of the following:

	Amortization Periods (in years)	Cost		Accumulated Amortization			Net Carrying Value
Adamis:
Taper DPI Intellectual Property	5 years	$	9,708,700	$	(2,669,892	)	$	7,038,808
USC:
Trade Name and Brand	Indefinite		1,245,000		—			1,245,000
Non-competition Agreement	3 years		1,639,000		(256,473	)		1,382,527
Customer Relationships	10 years		5,572,000		(261,574	)		5,310,426
FDA 503B Registration and Compliance	10 years		3,963,000		(186,041	)		3,776,959
		$	22,127,700	$	(3,373,980	)	$	18,753,720

 Amortization expense for intangible assets for the periods ended September 30, 2016, was as follows:

	For the Three Months Ended September 30, 2016		For the Nine Months Ended September 30, 2016
Adamis:
Taper DPI Intellectual Property	$	242,717	$	728,152
USC:
Trade Name and Brand		—		—
Non-competition Agreement		136,583		256,473
Customer Relationships		139,300		261,574
FDA 503B Registration and Compliance		99,075		186,041
	$	617,675	$	1,432,240

Estimated future amortization expense for the Company's intangible assets at September 30, 2016, is as follows:

Remainder of 2016	$	617,676
2017		2,470,703
2018		2,470,703
2019		2,077,647
2020		1,924,370
Thereafter		7,947,621
	$	17,508,720

Goodwill recorded at the acquisition of USC was approximately $2,225,000. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill is not amortized and is not deductible for income tax purposes. As indicated in Note 2 above, with respect to the Company’s acquisition of USC in April 2016, a final allocation of fair value to the USC assets and liabilities, including intangible assets and goodwill, has not been made. As a result, the amount of intangible assets, amortization expense and goodwill are subject to change, and differences between the preliminary and final purchase price allocations could have a material impact on the determination of such amounts.