Quarterly report pursuant to Section 13 or 15(d)

Intellectual Property

Intellectual Property

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

4. Intellectual Property

On July 3, 2014, five of the founding stockholders contributed the rights to certain intellectual property to the Company in exchange for the issuance of 4,101,822 shares with a fair value of $1,059,000. This contribution was recorded as an intangible asset with an offset to additional paid-in capital for $637,000 and deferred taxes for $422,000.

Intellectual property, net, is comprised of the following as of the dates indicated (in thousands):

	September 30, 2016			December 31, 2015
Intellectual property	$	1,384		$	1,219
Accumulated amortization		(247	)		(154	)
Intellectual property, net	$	1,137		$	1,065

Amortization expense was $34,000 and $27,000 for the three months ended September 30, 2016 and 2015, respectively and $93,000 and $81,000 for the nine months ended September 30, 2016 and 2015, respectively.