Annual report pursuant to Section 13 and 15(d)

Intangible Assets

Intangible Assets
12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets Intangible Assets
The Company’s intangible assets consist of the following:
December 31, 2020 December 31, 2019
Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Amortized intangible assets
Patents $ 1,496  $ (139) $ 1,357  $ 845  $ (84) $ 761 
License agreements 1,093  (745) 348  1,067  (647) 420 
Total amortizable intangible assets 2,589  (884) 1,705  1,912  (731) 1,181 
Unamortized intangible assets
Trademarks 349  —  349  334  —  334 
Total intangible asset, net $ 2,938  $ (884) $ 2,054  $ 2,246  $ (731) $ 1,515 
License agreements are being amortized over periods ranging from seventeen to twenty years. Patents are being amortized over periods up to twenty years. Amortization expense for 2020, 2019 and 2018 was approximately $153, $123 and $77,
respectively. In January 2019, the Company rebranded its logo and product name designs, as a result the Company recorded a $104 impairment charge related to the previous logo and product design names. This charge is recorded in the “General and Administrative” in the Statement of Operations. As of December 31, 2020, future amortization of patents and license agreements are as follows:

Year Ending December 31,
2021 $ 170 
2022 170 
2023 164 
2024 77 
2025 77 
Thereafter 1,047 
Total $ 1,705 
License Agreements
The Company has entered into multiple license agreements with the University of Florida Research Foundation and the University of Texas at Austin (together, the “License Agreements”). Under the terms of the License Agreements, the Company acquired exclusive worldwide licenses for underlying technology used in repairing and regenerating nerves. The licensed technologies include the rights to issued patents and patents pending in the United States and international markets. The effective term of the License Agreements extends through the term of the related patents and the agreements may be terminated by the Company with 60 days prior written notice. Additionally, in the event of default, licensors may terminate an agreement if the Company fails to cure a breach after written notice. The License Agreements contain the key terms listed below:
Axogen pays royalty fees ranging from 1% to 3% under the License Agreements based on net sales of licensed products. One of the agreements also contains a minimum royalty of $13 per quarter, which may include a credit in future quarters in the same calendar year for the amount the minimum royalty exceeds the royalty fees. Also, when Axogen pays royalties to more than one licensor for sales of the same product, a royalty stack cap applies, capping total royalties at 3.75%;
If Axogen sublicenses technologies covered by the License Agreements to third parties, Axogen would pay a percentage of sublicense fees received from the third party to the licensor. Currently, Axogen does not sublicense any technologies covered by License Agreements. The Company is not considered a sub-licensee under the License Agreements and does not owe any sub-licensee fees for its own use of the technologies;
Axogen reimburses the licensors for certain legal expenses incurred for patent prosecution and defense of the technologies covered by the License Agreements; and
Currently, under the University of Texas at Austin’s agreement, Axogen would owe a $15 milestone fee upon receiving a Phase II Small Business Innovation Research or Phase II Small Business Technology Transfer grant involving the licensed technology. The Company has not received either grant and does not owe such a milestone fee. A milestone fee to the University of Florida Research Foundation of $2 is due if Axogen receives FDA approval of its Avance Nerve Graft, a milestone fee of $25 is due upon the first commercial use of certain licensed technology to provide services to manufacture products for third parties and a milestone fee of $10 is due upon the first use to manufacture products that utilize certain technology that is not currently incorporated into Axogen products.
Royalty fees were $2,289, $2,119 and $1,661 for the years ended December 31, 2020, 2019 and 2018, respectively, and are included in sales and marketing expense on the accompanying consolidated statements of operations.