INTANGIBLE ASSETS |
6 Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2026 | |||||||||||
| Intangible Asset, Goodwill and Other [Abstract] | |||||||||||
| INTANGIBLE ASSETS | NOTE 6. INTANGIBLE ASSETS
During the quarter ended June 30, 2026, in connection with the Kopin Joint Development Agreement, see Note 16. Commitments and Contingencies, the Company recognized an intangible asset of $17,238,716 representing the fair value of its right to acquire the license to use Kopin’s technology in the Company’s fabless semi-conductor manufacturing operations (the “License”). The fair value of the License was determined based on the fair value of the consideration transferred to Kopin, comprising the $730,533 initial fair value of the Series J Convertible Preferred Stock issued to Kopin (see Note 8. Stockholders’ Equity) and the $16,379,662 initial fair value of the associated anti-dilution liability (see Note 11. Fair Value Measurements), together with $128,521 of direct transaction costs incurred in connection with the transaction.
The License provides the core technology used in the Company’s fabless semiconductor manufacturing operations, and the Company expects its future revenue to be generated from the sale of semiconductors manufactured using that technology. In determining the useful life of the License, management analyzed all pertinent factors, including the terms of the underlying agreements and management’s intent and ability to continue the arrangement. As of June 30, 2026, management expects to extend the arrangement beyond its initial term and considers the probability of non-renewal or termination to be remote. Because the License is expected to contribute to the Company’s cash flows without a foreseeable limit, management concluded that the License has an indefinite useful life. Accordingly, the License is not amortized.
The Company reassess each reporting period whether events and circumstances continue to support indefinite useful life. The License is tested for impairment at least annually, and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. An impairment loss is recognized to the extent the carrying amount of the License exceeds its fair value. No impairment was recognized during the three and six months ended June 30, 2026.
Intangible assets subject to amortization consisted of the following at June 30, 2026:
|
||||||||||