NOTE 4. INTANGLIBLE ASSETS, NET

Definite-lived intangible assets, patents, and product development costs are included in intangible assets on the balance sheets and are amortized on a straight-line basis over their estimated lives, which approximates the pattern of expected economic benefit.

The weighted-average remaining amortization periods for intellectual property and product development assets were approximately 10.82 years and 3.02 years, respectively, as of June 30, 2026.

Amortization expense related to definite-lived intangible assets totaled approximately $8,097, for the six months ended June 30, 2026, and $22,926 for the year ended December 31, 2025, which is included in depreciation and amortization in the consolidated statements of operations.

Goodwill represents the excess of acquisition cost over the fair value of the net assets acquired and is subject to annual impairment assessment per ASC 350. The Company reviews goodwill annually in the fourth quarter for impairment or when circumstances indicate that the carrying value may exceed the fair value.

During the year ended December 31, 2025, the Company identified indicators of impairment related to its goodwill, including continued operating losses and updated cash flow projections for the reporting unit to which goodwill is assigned. As a result, the Company performed a quantitative impairment test and determined that the carrying amount of the reporting unit exceeded its estimated fair value. Accordingly, the Company recognized a goodwill impairment charge of 29,886 for the year ended December 31, 2025, which is included in operating expenses in the accompanying statement of operations. Following this impairment, the carrying amount of goodwill was 20,114 as of June 30, 2026.