Certain of Neo’s Internet-related technology assets were deter- mined to be impaired in April 2001. Accordingly, the Company recorded as cost of sales an impairment charge of $3,786, consisting of $2,350 relating to server maintenance technologies and $1,047 relating to multiplayer technologies developed by Neo’s development studio in connection with Online Pirates and $389 of capitalized soft- ware relating to other products to be developed by Neo. In addition, the Company recorded as selling and marketing expenses an impair- ment charge of $401 related to online sales promotions. Pro forma financial information for fiscal 2003 and 2002 acquisi- tions is not presented since the impact is not material. The unaudited pro forma data below for the year ended October 31, 2001 is pre- sented as if purchase acquisitions for fiscal 2001 had been made as of November 1, 2000. The unaudited pro forma financial information is based on management’s estimates and assumptions and does not purport to represent the results that actually would have occurred if the acquisitions had, in fact, been completed on the date assumed, or which may result in the future. Intangible assets consist of trademarks, intellectual property, cus- tomer lists and acquired technology. The excess purchase price paid over identified intangible and tangible net assets of acquired compa- nies is reported separately as goodwill. During the year ended October 31, 2003, the Company acquired all the intellectual property rights associated with  Army Men and School Tycoon for an aggregate cost of $1,075. In May 2002, the Company acquired all rights, title and interest to the  Max Payne product franchise, including all of the intellectual property rights associated with the brand, and a perpetual, royalty- free license to use the  Max Payne game engine and related technolo- gy. The purchase price consisted of $10,000 in cash and 969,932 shares of restricted common stock (valued at $18,543). In October 2003, the Company recorded an additional intangible of $8,000, of which $1,000 related to the delivery of the final version of  Max Payne 2 for the PC and $7,000 based on the determination that the sales targets for the PC and console versions of  Max Payne would be achieved. The  Max Payne assets acquired have been recorded as intellectual property and included in intangible assets. In December 2000, the Company acquired the exclusive world- wide publishing rights to the franchise of  Duke Nukem PC and video games. In connection with the transaction, the Company paid $2,300 in cash and issued 557,103 shares of its common stock (valued at approximately $5,400). In addition, the Company is required to make a further payment of $6,000 contingent upon delivery of the final ver- sion of  Duke Nukem Forever for the PC. The Company recorded an intangible asset of $7,700 related to the intellectual property pur- chased in this transaction. The additional $6,000 will be recorded as an additional intangible asset upon resolution of the contingency. In 2003, the Company recorded a charge of $4,407 related to the impairment of a customer list, which was included in depreciation and amortization (see Note 20). In addition, cost of sales—product costs include $7,892 of intellectual property and technology written off in 2003, of which $5,499 related to  Duke Nukem Forever  and its sequel, reflecting the continued development delays for these products. In July 2001, the Company sold all of the outstanding capital  stock of Jack of All Games UK, a video game distributor, to Jay Two Limited, an unaffiliated third party controlled by Freightmasters Ltd., for approximately $215. In connection with the sale, the purchaser assumed net liabilities of $436. The Company recorded a non-operat- ing gain of $651. There were no income taxes payable on this gain. Included in the unaudited pro forma information is amortization of goodwill of approximately $7,320, net of taxes of $2,799, for the year ended October 31, 2001. As a result of the adoption of SFAS 142, the Company discontin- ued the amortization of goodwill effective November 1, 2001. Identifi- able intangible assets are amortized under the straight-line method over the period of expected benefit ranging from three to ten years, except for intellectual property, which is amortized based on the shorter of the useful life or expected revenue stream. The Company re-characterized acquired workforce of $925, which is not defined as an acquired intangible asset under SFAS 141, as goodwill. Additional- ly, the estimated useful lives of certain identifiable intangible assets were adjusted in conjunction with the adoption of SFAS 142. The adjustment to the useful lives did not have a material effect on the results of operations. 6. INTANGIBLE ASSETS AND GOODWILL 5. DISPOSITION OF ASSETS Unaudited Pro Forma October 31, 2001 (Restated) Net sales $459,006 Loss before cumulative effect of change in  accounting principle $ (4,458) Net loss $ (9,702) Net loss per share—Basic $ (0.28) Net loss per share—Diluted $ (0.28) 39