NOTE 3 – PATENT COSTS

Patent costs represent the capitalized purchase price of assets acquired in the secured party sale as part of the Company’s strategy to acquire undervalued biotechnology companies and assets. As of September 30, 2013, the Company had purchased $800,000 worth of biotechnology patents and other intellectual property. In these acquisitions, the Company used approximately $300,000 in cash and issued a $500,000 convertible debenture for the remainder of the cost, which has been paid in full.

The Company amortizes its patents over the life of each patent. During the years ended September 30, 2013 and 2012, the Company recognized $77,789 and $78,273, respectively, in amortization expense on the patents. The amortization expense has been included in research and development expense.