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INTANGIBLE ASSETS
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Jun. 30, 2013
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| INTANGIBLE ASSETS |
NOTE 4 – INTANGIBLE ASSETS
License Agreement
The Company has a license agreement with two inventors ("Licensors") for the worldwide rights to the MMP inhibitors and uses thereof. The license agreement transfers to the Company the technology that is the subject of issued patents as well as pending patent applications, which were filed by the original Inventors. The licenses are amortized on a straight-line basis over the estimated useful lives of the underlying patents or the license agreement. The U.S. patents expire beginning November 2007 through December 2019 and the international patents expire beginning on November 21, 2011 through December 8, 2019.
In November 2002, the Company and the University of Florida Research Foundation (the "University") entered into an agreement whereby the University gave the Company exclusive sub-license rights to the use of its patents and patent applications from the effective date of the agreement until the earlier of the date that no licensed patents remain enforceable patents or the payment of earned royalties ceases more than three calendar quarters. The royalty rate is 3% of the first $10 million of cumulative realized revenues and 1.8% of all subsequent realized revenues.
In June 2007, the Company and the Regents of the University of Michigan ("Michigan") entered into an agreement whereby Michigan gave the Company worldwide exclusive rights including sub-license rights to the use of its patents and patent applications of the uses of MMP inhibitors from the effective date of the agreement until the earlier of the date that no licensed patents remain enforceable patents or the default event. In addition to the initial license fee of $80,000, the Company will pay a 4% royalty rate of the net sales, 20% of the sublicense income, the annual fee of $50,000 for 2008 and 2009, $75,000 for 2010 and $100,000 in 2011 and in each year thereafter during the term of the agreement.
During the fiscal year 2006, the Company was issued both US and international patents for its NIMBUS technology on "Intrinsically Bactericidal Absorbent Dressing And Method Of Fabrication". These patents expire on December 8, 2019. The total capitalized costs for this issued patent were $35,470 and are being amortized over the life of the patents.
During the fiscal years 2013 and 2012, the Company was granted certain US and international patents and filed a number of US and international patent applications for its NIMBUS, Stay Fresh, and NimbuDerm technologies and applied for certain trademarks.
As of June 30, 2013, there was an impairment of the Company's intangible assets in the amount of $58,460 which was recognized as impairment expense on the Company's statement of operations. The impairment loss resulted from the write-off an in-process patent cost for a country that the Company decided to no longer pursue.
Amortization of patents in process commences when the patents are issued.
At June 30, 2013, total unamortized capitalized intangible assets costs are approximately $152,000, which are expected to be amortized and recognized over a weighted-average period of ten years.
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