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PATENT COSTS
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3 Months Ended |
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Dec. 31, 2011
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| Patent Costs | |
| PATENT COSTS |
NOTE 4 – PATENT COSTS
Patent costs represent the capitalized purchase price of assets acquired in the secured party sale as part of the Company’s previously announced strategy to create a rollup of undervalued biotechnology companies and assets. As of December 31, 2011, 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 was secured by the acquired assets. The convertible debenture was repaid on December 29, 2010 and all security interests were released.
The Company amortizes its patents over life of the each patent. During the three months ended December 31, 2011 and 2010, the Company recognized $19,754 and $19,593 in amortization expense on the patents, respectively. The amortization expense has been included in research and development expense.
The Company reviews the carrying value of its patents at least annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company uses an estimate of undiscounted future net cash flows of the assets over the remaining useful lives in determining whether the carrying value of the patents is recoverable. If the carrying values of the patents exceed the expected future cash flows of the patents, the Company recognizes an impairment loss equal to the difference between the carrying values of the patents and their estimated fair values. As of December 31, 2011 and September 30, 2011, management does not believe the Company’s patents were impaired.
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