ATOSSA THERAPEUTICS, INC. Goodwill & Intangibles Disclosure
NOTE 8: INTANGIBLE ASSETS
Intangible assets consisted of the following:
| December 31, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Patents | $ | 120,000 | $ | 639,000 | ||||
| Software | 113,540 | 113,540 | ||||||
| Intangible assets | 233,540 | 752,540 | ||||||
| Less: accumulated amortization | (157,854 | ) | (112,100 | ) | ||||
| Total intangible assets, net | $ | 75,686 | $ | 640,440 | ||||
Intangible assets amounted to $75,686 and $640,440 as of December 31, 2017, and December 31, 2016, respectively, and consisted of patents and software acquired. The amortization period for the purchased software is three years. Amortization expense related to software for the years ended December 31, 2017 and 2016 was $32,754 and $28,806, respectively.
Patent assets are amortized based on their determined useful life. We continuously evaluate and reprioritize our research and development pipeline based on the most recent business strategies, and as a result have delayed plans to develop and invest further in Acueity patents and technologies. In 2017 and 2016, we evaluated the Acueity assets and determined that the assets were impaired for the years ended December 31, 2017 and 2016 and we reduced the net carrying value of the patents by $461,715 and $718,970.
The amortization period of the remaining patents is 10 years. Amortization expense related to patents was $70,284 and $149,015 for the years ended December 31, 2017 and 2016, respectively.
Future estimated amortization expenses as of December 31, 2017, for the five succeeding years and thereafter is as follows:
| Years Ending December 31, | Amounts | |||
| 2018 | $ | 25,353 | ||
| 2019 | 13,000 | |||
| 2020 | 13,000 | |||
| 2021 | 13,000 | |||
| 2022 | 11,333 | |||
| $ | 75,686 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2017 | Mar 8, 2018 | Showing above |
| 2016 | Mar 16, 2017 | |
| 2015 | Mar 30, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.