Note 8.  Other long-term assets

Intangible rights acquired totaling $700,000 and $754,000, as of December 31, 2018 and 2017, respectively, consisted of intangible rights associated with the Tess and Logical Brokerage acquisitions.

Other long-term assets consisted of the following as of December 31, 2018 and December 31, 2017:

 

Cost:		December 31, 2018				December 31, 2017
Patents		$	1,119,428			$	1,059,832
Goodwill			-				1,186,496
Convertible note investment			200,000				200,000
Total			1,319,428				2,446,328
Accumulated amortization:
Patents			(612,086	)			(550,183	)
Total			(612,086	)			(550,183	)
Net other long-term assets		$	707,342			$	1,896,145

Patents

The Company’s intangible assets with finite lives consist of its patents pertaining to its legacy animal health business, which have been out-licensed. For all periods presented, all of the Company’s identifiable intangible assets were subject to amortization. The carrying amounts related to acquired intangible assets as of December 31, 2018 and 2017 were as follows:

 

Patents at January 1, 2017, net		$	550,799
Additions			26,850
Less: amortization expense			68,000
Patents at December 31, 2017, net			509,649
Additions			59,597
Less: amortization expense			61,904
Patents at December 31, 2018, net		$	507,342

 

The following table represents the total estimated amortization of intangible assets for the five succeeding years and thereafter:

For the year ended December 31,		Estimated amortization expense
2019		$	58,000
2020			58,000
2021			58,000
2022			58,000
2023 and thereafter			275,342
Total		$	507,342

The Company capitalizes legal costs and filing fees associated with obtaining patents on its new discoveries. Once the patents have been issued, the Company amortizes these costs over the shorter of the legal life of the patent or its estimated economic life using the straight-line method. Amortization expense totaled $62,000 and $68,000 for the years ended December 31, 2018 and 2017, respectively. The Company tests intangible assets with finite lives upon significant changes in the Company’s business environment. The testing resulted in no patent impairment charges during the years ended December 31, 2018 and 2017.

Investment in Verady, LLC

During November 2017, the Company made a $200,000 investment in a convertible note as part of a series of notes issued and being issued by Verady, LLC ("Verady"). The notes are unsecured, subordinated to other approved liabilities, mature December 31, 2022, bear interest at 6%, unless previously repaid or converted and contain other conditions and restrictions, all as defined under the subscription documents. The Verady convertible note is recorded at fair value (which approximates cost) as of December 31, 2018 and 2017. The conversion rate of the convertible note is defined based upon the possible occurrence of certain defined events which may or may not occur. If such a defined event successfully occurs, the Company currently estimates that its convertible note would result in a maximum ownership interest of approximately 12%. The Company has no other relationship or rights associated with Verady.  Founded in 2016, Verady is privately held and recently launched VeraNet, a decentralized network of financial reporting and accounting tools targeted to the needs of the digital currency community. As of December 31, 2018 and 2017, the Company considered the cost of the investment to not exceed the fair value of the investment and did not observe price changes.