Ann: Annual Report to shareholders, page-73

You are correct the intangibles are being written down every year and will be gone in about 10 years. It is the value of an acquisition over and above the acquisitions tangible assets or as is partially the case with CLG, some were created in the original merger and ipo. The value of intangibles only comes from the income that can be ascribed to them, ie the value of the acquisition. And that value can be questioned by the auditor/board and ultimately written down at a rate over and above the amount per year. This write down is taken through the P&L and although it doesnt affect the cash brought in by the business, it does affect the ratios that go along with that ie debt to earnings and ultimately the debt covenants. While I dont think it is an issue for the ISP tek acquisition, which is the reason I like the stock, I do think it is a bit of an issue from the original assets put together at the time of the merger.

It is the write down that is taken through the profit and loss that can bring a company down by triggering debt covenants. Before anyone goes berserk, I am not suggesting that will happen to CLG.