| Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Basis of Presentation and Principles
of Consolidation The accompanying consolidated condensed
financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant
to such rules and regulations. These consolidated condensed financial statements reflect all adjustments (consisting only of normal
recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position, the results
of operations and cash flows of the Company for the periods presented. It is suggested that these consolidated condensed financial
statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s
most recent Annual Report on Form 10-K. The results of operations for the interim periods are not necessarily indicative of the
results to be expected for the full year. Use of Estimates and Assumptions The preparation of financial statements
in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made
by management include, but are not limited to, estimating the useful lives of patent assets, the assumptions used to calculate
fair value of warrants and options granted, goodwill impairment, realization of long-lived assets, deferred income taxes, unrealized
tax positions and business combination accounting. Cash The Company considers all highly liquid
debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents.
The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance
Corporation and restricted cash, held in escrow pursuant to the terms of the Unit Purchase Agreement entered into on August 14,
2017, with another financial institution that is also insured by the Federal Deposit Insurance Corporation. The Company’s
accounts held at this institution, up to a limit of $250,000, are insured by the Federal Deposit Insurance Corporation (“FDIC”).
As of September 30, 2017, the Company had bank balances exceeding the FDIC insurance limit. To reduce its risk associated with
the failure of such financial institution, the Company evaluates at least annually the rating of the financial institution in which
it holds deposits. Accounts Receivable The Company has a policy of reserving
for questionable accounts based on its best estimate of the amount of probable credit losses in its existing accounts receivable.
The Company periodically reviews its accounts receivable to determine whether an allowance is necessary based on an analysis of
past due accounts and other factors that may indicate that the realization of an account may be in doubt. Account balances deemed
to be uncollectible are charged to the bad debt expense after all means of collection have been exhausted and the potential for
recovery is considered remote. At each of September 30, 2017 and December 31, 2016, the Company had recorded an allowance for bad
debts in the amount of $387,976 and $387,976, respectively. Accounts receivable, net at September 30, 2017 and December 31, 2016,
amounted to $123,630 and $95,069, respectively. Concentration of Revenue and Geographic
Area Revenue from the Company’s patent
enforcement activities is considered United States revenue as any payments for licenses included in that revenue are for United
States operations irrespective of the location of the licensee’s or licensee’s parent home domicile. The Company had $0 in revenues from
newly issued patent licenses for both the three months ended September 30, 2017 and the three months ended September 30, 2016.
The revenue for the three months ended September 30, 2017 is attributable to a non-enforcement technology access license for one
of the Company’s subsidiaries and running royalties from the Company’s Medtech portfolio and for the three months ended
September 30, 2016, the revenue is attributable to running royalties from the Company’s Medtech portfolio. At the current time, we define customers
as firms that obtain licenses to the Company’s patents, either prior to or during enforcement litigation. These firms generally
enter into non-recurring, non-exclusive, non-assignable license agreements with the Company, and these customers do not generally
engage in ongoing, recurring business activity with the Company. The Company has historically had a small number of customers enter
into such agreements, resulting in higher levels of revenue concentration. Revenue Recognition The Company recognizes revenue in accordance
with Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition”. Revenue is recognized
when (i) persuasive evidence of an arrangement exists, (ii) all obligations have been substantially performed, (iii) amounts are
fixed or determinable and (iv) collectability of amounts is reasonably assured. In general, revenue arrangements provide for the
payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies
owned or controlled by the Company. These rights typically include some
combination of the following: (i) the grant of a non-exclusive, perpetual license to use patented technologies owned or controlled
by the Company, (ii) a covenant-not-to-sue, (iii) the dismissal of any pending litigation. The intellectual property rights granted
typically are perpetual in nature. Pursuant to the terms of these agreements, the Company has no further obligation with respect
to the grant of the non-exclusive licenses, covenants-not-to-sue, releases, and other deliverables, including no express or implied
obligation on the Company’s part to maintain or upgrade the technology, or provide future support or services. Generally,
the agreements provide for the grant of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution
of the agreement. As such, the earnings process is complete and revenue is recognized upon the execution of the agreement, when
collectability is reasonably assured, and when all other revenue recognition criteria have been met. The Company also considers the revenue
generated from its settlement and licensing agreements as one unit of accounting under ASC 605-25, “Multiple-Element Arrangements”
as the delivered items do not have value to customers on a standalone basis, there are no undelivered elements and there is no
general right of return relative to the license. Under ASC 605-25, the appropriate recognition of revenue is determined for the
combined deliverables as a single unit of accounting and revenue is recognized upon delivery of the final elements, including the
license for past and future use and the release. Also, since the settlement element and
license element for past and future use are the Company’s major central business, the Company presents these two elements
as one revenue category in its statement of operations. The Company does not expect to provide licenses that do not provide some
form of settlement or release. There was no revenue from newly issued patent licenses for the three months ended September 30,
2017 and September 30, 2016, respectively. Prepaid Expenses and Other Current
Assets Prepaid expenses and other current assets
of $108,878 and $202,067 at September 30, 2017 and December 31, 2016, respectively, consist primarily of costs paid for future
services, which will occur within a year. Prepaid expenses include prepayments in cash and equity instruments for public relation
services, business advisory, consulting, and prepaid insurance, which are being amortized over the terms of their respective agreements. Bonds Posted with Courts Under certain circumstances related
to litigations in Germany, the Company is either required to or may decide to enter a bond with the courts. As of September 30,
2017 and December 31, 2016, the Company had no outstanding bonds posted with the German courts. Related Party Transactions Parties are considered related to the
Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common
control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate
families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls
or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties
might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. On May 13, 2013, we entered into a nine-year
advisory services agreement (the “Advisory Services Agreement”) with IP Navigation Group, LLC (“IP Nav”),
of which Erich Spangenberg is founder and former Chief Executive Officer. Mr. Spangenberg is an affiliate of the Company. The terms
of the Advisory Services Agreement provide that, in consideration for its services as intellectual property licensing agent, the
Company will pay to IP Navigation Group, LLC between 10% and 20% of the gross proceeds of certain licensing campaigns in which
IP Navigation Group, LLC acts as intellectual property licensing agent. On November 18, 2013, we entered into
a consulting agreement with Jeff Feinberg (“Feinberg Agreement”), pursuant to which we agreed to grant Mr. Feinberg
25,000 shares of our restricted Common Stock, 50% of which shall vest on the one-year anniversary of the Feinberg Agreement and
the remaining 50% of which shall vest on the second-year anniversary of the Feinberg Agreement. Mr. Feinberg is the trustee of
The Feinberg Family Trust and holds voting and dispositive power over shares held by The Feinberg Family Trust, which is a 10%
beneficial owner of our Common Stock. On May 2, 2014, the Company completed
the acquisition of certain ownership rights (the “Acquired Intellectual Property”) from TechDev, Granicus and SFF pursuant
to the terms of three purchase agreements between: (i) the Company, TechDev, SFF and DA Acquisition LLC, a newly formed Texas limited
liability company and wholly-owned subsidiary of the Company; (ii) the Company, Granicus, SFF and IP Liquidity Ventures Acquisition
LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the Company; and (iii) the Company, TechDev,
SFF and Sarif Biomedical Acquisition LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of the
Company. TechDev, SFF and Granicus are owned or controlled by Erich Spangenberg or family members or associates.
● Pursuant to the DA Agreement, the Company acquired 100% of the limited liability company membership interests of Dynamic Advances, LLC, a Texas limited liability company, in consideration for: (i) two cash payments of $2,375,000, one payment due at closing and the other payment was due on or before June 30, 2014, with such second payment being subject to increase to $2,850,000 if not made on or before June 30, 2014; and (ii) 97,750 shares of the Company’s Series B Convertible Preferred Stock. The remaining cash payment was made on April 1, 2015 and is fully paid. Under the terms of the DA Agreement, TechDev and SFF are entitled to possible future payments for a maximum consideration of $250,000,000 pursuant to the Pay Proceeds Agreement described below.
● Pursuant to the IP Liquidity Agreement, the Company acquired 100% of the limited liability company membership interests of IP Liquidity Ventures, LLC, a Delaware limited liability company, in consideration for: (i) two cash payments of $2,375,000, one payment due at closing and the other payment was due on or before June 30, 2014, with such second payment being subject to increase to $2,850,000 if not made on or before June 30, 2014; and (ii) 97,750 shares of the Company’s Series B Convertible Preferred Stock. The remaining cash payment was made on April 1, 2015 and is fully paid. Under the terms of the IP Liquidity Agreement, Granicus and SFF are entitled to possible future payments for a maximum consideration of $250,000,000 pursuant to the Pay Proceeds Agreement described below.
● Pursuant to the Sarif Agreement, the Company acquired 100% of the limited liability company membership interests of Sarif Biomedical, LLC, a Delaware limited liability company, in consideration for two cash payments of $250,000, one payment due at closing and the other payment was due on or before June 30, 2014, with such second payment being subject to increase to $300,000 if not made on or before June 30, 2014. The remaining cash payment was made on February 24, 2015 and is fully paid. Under the terms of the Sarif Agreement, TechDev and SFF are entitled to possible future payments for a maximum consideration of $250,000,000 pursuant to the Pay Proceeds Agreement described below.
● Pursuant to the Pay Proceeds Agreement, the Company may pay the sellers a percentage of the net recoveries (gross revenues minus certain defined expenses) that the Company makes with respect to the assets held by the entities that the Company acquired pursuant to the DA Agreement, the IP Liquidity Agreement and the Sarif Agreement. Under the terms of the Pay Proceeds Agreement, as amended in 2016, if the Company recovers $10,000,000 or less with regard to the IP Assets, then nothing is due to the sellers; if the Company recovers between $13,000,000 and $40,000,000 with regard to the IP Assets, then the Company shall pay 40% of the cumulative gross proceeds of such recoveries to the sellers; and if the Company recovers over $40,000,000 with regard to the IP Assets, the Company shall pay 50% of the cumulative gross proceeds of such recoveries to the sellers. Pursuant to the amendment to the Pay Proceeds Agreement, the Company paid TechDev, Granicus and SFF $2.4 million. In no event will the total payments made by the Company under the Pay Proceeds Agreement exceed $250,000,000. On May 2, 2014, we entered into an opportunity
agreement (the “Marathon Opportunity Agreement”) with Erich Spangenberg, who is an affiliate of the Company. The terms
of the Marathon Opportunity Agreement provide that we have ten business days after receiving notice from Mr. Spangenberg to provide
up to 50% of the funding for certain opportunities relating to the licensing, intellectual property acquisitions and/or intellectual
property enforcement actions in which Mr. Spangenberg, IP Nav or any entity controlled by Mr. Spangenberg, other than: (i) IP Nav
or any of its affiliates, and (ii) Medtech Development, LLC or any of its affiliates. On June 17, 2014, Selene Communication
Technologies Acquisition LLC (“Acquisition LLC”), a Delaware limited liability company and newly formed wholly-owned
subsidiary of the Company, entered into a merger agreement with Selene Communication Technologies, LLC (“Selene”).
Selene owned a patent portfolio consisting of three United States patents in the field of search and network intrusion that relate
to tools for intelligent searches applied to data management systems as well as global information networks such as the internet.
IP Nav provided patent monetization and support services under an existing agreement with Selene prior to the return of the patents
to Stanford Research Institute (“SRI”), the original owners of the patents. On August 29, 2014, the Company entered
into a patent purchase agreement to acquire a portfolio of patents from Clouding IP, LLC for an aggregate purchase price of $2.4
million, of which $1.4 million was paid in cash and $1.0 million was paid in the form of a promissory note issued by the Company
that matured on October 31, 2014 and was fully paid prior to the maturation date. The Company also issued 6,250 shares of its restricted
common stock in connection with the acquisition. Clouding IP, LLC is also entitled to certain possible future cash payments. Clouding
IP LLC is owned or controlled by Erich Spangenberg or family members or associates. On October 10, 2014, the Company entered
into an interest sale agreement with MedTech Development, LLC (“MedTech”) to acquire from MedTech 100% of the limited
liability membership interests of OrthoPhoenix and TLIF as well as 100% of the shares of MedTech GmbH. In connection with the transaction,
the Company is obligated to pay to MedTech $1 million at closing and $1 million on each of the following nine (9) month anniversary
dates of the closing. On July 16, 2015, the Company entered into a forbearance agreement (the “Agreement”) with MedTech
Development, the holder of a Promissory Note issued by the Company, dated October 10, 2014. Pursuant to the Agreement, the term
of the Note was extended to October 1, 2015 and the Note began accruing interest starting from May 13, 2015. In addition, the Company
agreed to make certain mandatory prepayments under certain circumstances and issue to MedTech Development 500,000 shares of restricted
common stock of the Company. In accordance with ASC 470-50, the Company recorded this agreement as debt extinguishment and $654,000
was recorded as loss on debt extinguishment during the year ended September 30, 2015. On October 23, 2015, the Company entered
into Amendment No. 1 to the Forbearance Agreement (the “Amendment”) entered into with MedTech Development on July 16,
2015. Pursuant to the Amendment, the due date of the Promissory Note was extended to October 23, 2016 in return for which the Company
made a payment of $100,000 on October 23, 2015 and modified the terms under which the Company agreed to make mandatory prepayments
under certain circumstances. The acquired subsidiaries are also obligated to make certain additional payments to MedTech from recoveries
following the receipt by the acquired subsidiaries of 200% of the purchase payments, plus recovery of out of pocket expenses in
connection with patent claims. The participation payments may be paid, at the election of the Company, in common stock of Marathon
at the market price on the date of issuance. In connection with the transaction, the Company entered into a promissory note, common
interest agreement and in the event of issuance of common stock to MedTech, will enter into a lockup and registration rights agreement.
Approximately forty-five percent (45%) of MedTech is owned or controlled by Erich Spangenberg or family members or associates. On October 1, 2016, one of the Company’s
subsidiaries, PG Technologies S.a.r.l. entered into an advisory services agreement with Granicus IP, LLC, an entity owned or controlled
by one of the Company’s employees, whereby Granicus receives a percentage of pre-tax return from PG Technologies after certain
revenue thresholds have been met. During 2016, certain officers and directors
of the Company received restricted common stock in the Company’s 3D Nanocolor Corp. (“3D Nano”) subsidiary. At December 31, 2016, ‘‘Other
noncurrent assets’’ in the Balance Sheets consists of a note receivable from an entity controlled by one of the Company’s
employees that is uncollateralized. The note receivable does not carry interest and is repayable to the Company at the earlier
of March 31, 2022 or based on certain milestones. The note receivable balance has been classified as current assets because the
Company believes that it will be collected within one year from the Balance Sheet dates. On September 29, 2017, the Company
entered into an Irrevocable Stock Power whereby the Company sold the shares it owns in the Company’s subsidiary, 3D
Nano to Doug Croxall, the Company’s Chief Executive Officer with such assignment including the assumption of all of 3D
Nano’s liabilities. The Company engaged a third party to value the assignment, the results of which were that the
valuation and assignment were deemed to be at fair value. Fair Value of Financial Instruments The Company measures at fair value certain
of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest
and best use of the asset or liability. The levels of the fair value hierarchy are:
Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The carrying amounts reported in the
consolidated condensed balance sheet for cash, accounts receivable, bonds posted with courts, accounts payable, and accrued expenses,
approximate their estimated fair market value based on the short-term maturity of these instruments. The carrying value of notes
payable and other long-term liabilities approximates fair value as the related interest rates approximate rates currently available
to the Company. Clouding IP earn out liability was determined
as a Level 3 liability, which requires an assessment of fair value at each period end by using discounted cash flow as a valuation
technique using unobservable inputs, such as revenue and expenses forecasts, timing of proceeds, and discount rate. Based on reassessment
of fair value as of September 30, 2017, the Company determined that there was a reduction in the Clouding IP earn out liability
during the three and nine months ended September 30, 2017 in the amounts of $754,321and $754,321, respectively and a reduction
in the carrying value of the Clouding IP intangible assets during the three and nine months ended September 30, 2017 in the amounts
of $723,218 and $723,218, respectively. The Company determined that the Warrants
issued pursuant to the Unit Purchase Agreement should be treated as a Level 2 liability, which determine the value based on observable
market-based inputs. in this instance, the Warrants were valued using a Monte-Carlo simulation utilizing market-based inputs for
volatility and risk-free rate of interest, which resulted in the Warrants issued pursuant to the August 31, 2017 close being fair
valued at $0.0364 per share and the Warrants issued pursuant to the September 29, 2017 close being fair valued at $0.0877 per share. Accounting for Acquisitions In the normal course of its business,
the Company makes acquisitions of patent assets and may also make acquisitions of businesses. With respect to each such transaction,
the Company evaluates facts of the transaction and follows the guidelines prescribed in accordance with ASC 805 — Business
Combinations to determine the proper accounting treatment for each such transaction and then records the transaction in accordance
with the conclusions reached in such analysis.The Company performs such analysis with respect to each material acquisition within
the consolidated group of entities. Income Taxes The Company accounts for income taxes
pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” which requires, among other things, an asset
and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred
tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the
tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management
believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provision of
the ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, it is more likely than not
that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty
about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the
guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based
on all available evidence, management believes it is most likely that not that the position will be sustained upon examination,
including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other
positions. Tax positions that meet the more-likely-than-not
recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement
with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured
as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any
associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax
positions will more likely than not be upheld upon examination. As such, the Company has not recorded a liability for uncertain
tax benefits. The federal and state income tax returns
of the Company are subject to examination by the Internal Revenue Service and state taxing authorities, generally for three years
after they were filed. The Company is in the process of filing the 2016 tax returns. After review of the prior year financial statements
and the results of operations through December 31, 2016, the Company has recorded a full valuation allowance on its deferred tax
asset. Basic and Diluted Net Loss per Share Net loss per common share is calculated
in accordance with ASC Topic 260: Earnings Per Share (“ASC 260”). Basic loss per share is computed by dividing net
loss by the weighted average number of shares of common stock outstanding during the period. The computation of diluted net loss
per share does not include dilutive common stock equivalents in the weighted average shares outstanding, as they would be anti-dilutive.
The Company has options to purchase 613,195 shares of Common Stock, warrants to purchase 7,487,894 shares of Common Stock, Convertible
Notes convertible into up to 13,750,000 shares of Common Stock and shares of Series B Convertible Preferred Stock convertible into
195,501 shares of Common Stock outstanding at September 30, 2017, which were excluded from the computation of diluted shares outstanding,
as they would have had an anti-dilutive impact on the Company’s net loss. The following table sets forth the computation
of basic and diluted loss per share:
For the Three Months Ended September 30, 2017
For the Three Months Ended September 30, 2016
For the Nine Months September 30, 2017
For the Nine Months September 30, 2016
Net income (loss) attributable to Common shareholders $ (6,677,485 ) $ (6,274,410 ) $ (12,484,924 ) $ (2,261,542 )
Denominator
Weighted average common shares – Basic and Diluted 6,270,299 3,761,786 5,564,465 3,736,213
Earnings (loss) per common share:
Earnings (loss) – Basic and Diluted $ (1.06 ) $ (1.67 ) $ (2.24 ) $ (0.60 ) Intangible Assets - Patents Intangible assets include patents purchased
and patents acquired in lieu of cash in licensing transactions. The patents purchased are recorded based on the cost to acquire
them and patents acquired in lieu of cash are recorded at their fair market value. The costs of these assets are amortized over
their remaining useful lives. Useful lives of intangible assets are periodically evaluated for reasonableness and the assets are
tested for impairment whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable.
The Company recorded impairment charges to its intangible assets during the three and nine months ended September 30, 2017 in the
amount of $723,218 and $723,218, respectively, compared to impairment charges associated with the end of life of a number of the
Company’s portfolios during the three and nine months ended September 30, 2016 in the amounts of $5,531,383 and $6,525,273,
respectively. Goodwill Goodwill is tested for impairment at
the reporting unit level at least annually in accordance with ASC 350, and between annual tests if an event occurs or circumstances
change that would more likely than not reduce the fair value of a reporting unit below its carrying value. When conducting its annual goodwill
impairment assessment, the Company initially performs a qualitative evaluation of whether it is more likely than not that goodwill
is impaired. If it is determined by a qualitative evaluation that it is more likely than not that goodwill is impaired, the Company
then applies a two-step impairment test. The two-step impairment test first compares the fair value of the Company’s reporting
unit to its carrying or book value. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired.
If the carrying value of the reporting unit exceeds its fair value, the Company determines the implied fair value of the reporting
unit’s goodwill and if the carrying value of the reporting unit’s goodwill exceeds its implied fair value, then an
impairment loss equal to the difference is recorded in the consolidated condensed statement of operations. The Company performs
the annual testing for impairment of goodwill at the reporting unit level during the quarter ended September 30. For the three and nine months ended
September 30, 2017 the Company recorded no impairment charge to its goodwill and for the three and nine months ended September
30, 2016, the Company recorded an impairment charge to its goodwill in the amount of $0 and $83,000, respectively. Other Intangible Assets In accordance with ASC 350-30, “Intangibles
- Goodwill and Others”, the Company assesses the impairment of identifiable intangibles whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment
review include the following: (1) significant underperformance relative to expected historical or projected future operating results;
(2) significant changes in the manner of use of the acquired assets or the strategy for the overall business; and (3) significant
negative industry or economic trends. When the Company determines that the
carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment
and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment
charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by
management to be commensurate with the risk inherent in the current business model. For the three and nine months ended
September 30, 2017 and September 30, 2016, the Company recorded no impairment charge to its other intangible assets. Impairment of Long-lived Assets The Company accounts for the impairment
or disposal of long-lived assets according to the ASC 360 “Property, Plant and Equipment”. The Company continually
monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future
net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated
fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured
by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows.
Accordingly, actual results could vary significantly from such |
