INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Note 3. INTANGIBLE ASSETS

As of December 31, 2011 and 2010, intangible assets related to the ETI Acquisition are as follows:

				2011				2010
	Estimated Life	Cost		Accumulated Amortization		Net		Net
Contract related intangible asset:
Cato Research discounted contract	3 years	$	355,000	$	355,000	$	—	$	—
Technology related intangible assets:
Patents for the AzoneTS-based product candidates and formulation	6 years		1,305,000		—		1,305,000		1,305,000
Drug Master Files containing formulation, clinical and safety documentation used by the FDA	6 years		1,500,000		—		1,500,000		1,500,000
In-process pharmaceutical products for 2 indications	6 years		6,820,000		—		6,820,000		6,820,000
Total technology related intangible assets			9,625,000		—		9,625,000		9,625,000
Total		$	9,980,000	$	355,000	$	9,625,000	$	9,625,000

Intangible assets related to technology are expected to be amortized on a straight-line basis over the period ending 2019 when the underlying patents expire and will commence upon revenue generation, which the Company has estimated to be during 2013.  The contract related intangible asset was amortized over a 3 year period which ended in 2010. Amortization expense relating to the contract was approximately $84,000 for the year ended December 31, 2010, and is included in research and development in the Consolidated Statement of Operations.  No such amortization was recorded in 2011 as the asset was fully amortized during the prior year.

Estimated amortization expense for each of the next five years is as follows:

	Estimated Amortization Expense
For the Year Ending December 31,
2012	$	—
2013		1,604,000
2014		1,604,000
2015		1,604,000
2016		1,604,000