3. IDENTIFIED INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2013

Disclosure Text Block [Abstract]

Intangible Assets Disclosure [Text Block]

3. IDENTIFIED INTANGIBLE ASSETS

A schedule of identified intangible assets is as follows:

	Gross		Accumulated		Carrying
December 31, 2013	Amount		Amortization		Amount
Trademarks
Wholesale	$	32,343,578	$	-	$	32,343,578
Retail		2,900,000		-		2,900,000
Patents		2,584,855		2,214,667		370,188
Customer Relationships		2,200,000		1,006,667		1,193,333
Total Intangibles	$	40,028,433	$	3,221,334	$	36,807,099

December 31, 2012
Trademarks
Wholesale	$	27,243,578	$	-	$	27,243,578
Retail		2,900,000		-		2,900,000
Patents		2,516,402		2,161,178		355,224
Customer Relationships		1,000,000		1,000,000		-
Total Intangibles	$	33,659,980	$	3,161,178	$	30,498,802

Amortization expense related to finite-lived intangible assets was approximately $60,000, $50,000 and $48,000 in 2013, 2012 and 2011, respectively. Such amortization expense will be approximately $130,000 per year for 2014 through 2018. The increase in future years is attributed to the additional amortization related to the additional customer relationship from the acquisition.

The weighted average lives of patents and customer relationships are 7 years.

As discussed further in Note 16, during late 2013, we acquired substantially all the assets of Kommonwealth, Inc. including the Creative Recreation trademark. As part of this acquisition, we recorded the fair value of the trademark of $5.1 million and the fair value of the customer relationship of $1.2 million. The trademark is an indefinite-lived intangible asset and will be reviewed annually for impairment or as events occur that would require a more frequent review. The customer relationship intangible will be amortized over 15 years.

Intangible assets, including trademarks and patents are reviewed for impairment annually, and more frequently, if necessary. We perform such testing of indefinite-lived intangible assets in the fourth quarter of each year or as events occur or circumstances change that would more likely than not reduce the fair value of the asset below its carrying amount. Fair value, for the testing, of other indefinite-lived intangible assets is determined using the relief from royalty method.

In assessing whether indefinite-lived intangible assets are impaired, we must make certain estimates and assumptions regarding future cash flows, long-term growth rates of our business, operating margins, weighted average cost of capital and other factors such as; discount rates, royalty rates, cost of capital, and market multiples to determine the fair value of our assets. These estimates and assumptions require management’s judgment, and changes to these estimates and assumptions could materially affect the determination of fair value and/or impairment for each of our indefinite-lived intangible assets. Future events could cause us to conclude that indications of intangible asset impairment exist. Impairment may result from, among other things, deterioration in the performance of our business, adverse market conditions, adverse changes in applicable laws and regulations, competition, or the sale or disposition of a reporting segment. Any resulting impairment loss could have a material adverse impact on our financial condition and results of operations.

We evaluate our finite and indefinite lived trademarks under the terms and provisions of the accounting standards for “Intangibles - Goodwill and Other”; and “Property, Plant and Equipment.” These pronouncements require that we compare the fair value of an intangible asset with its carrying amount. Our 2013 and 2012 evaluation did not result in the impairment of any of our indefinite lived intangible assets.