Intangible Assets and Royalty Agreement (Tables)

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets are summarized as follows:



	Weighted Average Amortization Lives	September 30, 2014 Cost			December 31, 2013 Cost
Licenses (a) (b)	10 years	$	1,009,000		$	1,009,000
Patents & Know How (b)	14 years	7,888,856			7,798,910
Customer & Supplier Relationships (b)	14 years	3,761,000			3,761,000
Tradenames & Trademarks (b)	indefinite	1,008,000			1,008,000
In Process Research & Development (b)	indefinite	25,000			25,000
Patents in Process (c)	indefinite	967,136			579,987
Total		14,658,992			14,181,897
Less Accumulated amortization		(3,698,692		)	(3,003,324		)
Net		$	10,960,300		$	11,178,573

(a)

On January 29, 2007, the Company acquired a license from Shriners Hospitals for Children and University of South Florida Research Foundation, Inc. in the amount of $996,000. Within 30 days after the receipt by the Company of approval by the FDA allowing the sale of the first licensed product, the Company is required to pay an additional $200,000 to the licensor. Due to its contingent nature, this amount is not recorded as a liability. The Company will also be required to pay a royalty of 3% on all commercial sales revenue from the licensed products. The Company is also obligated to pay a $50,000 minimum annual royalty payment over the life of the license. As of September 30, 2014, this license had a remaining net book value of approximately $234,000.

(b)

On January 5, 2011, the Company acquired Surgical Biologics, LLC. As a result, the Company recorded intangible assets for Customer & Supplier Relationships of $3,761,000, Patents & Know-How of $7,690,000, Licenses of $13,000, Trade Names & Trademarks of $1,008,000 and In-Process Research & Development of $25,000. For the nine months ended September 30, 2014 an additional $89,946 of costs associated with patents granted during the period were capitalized and included in Patents & Know-How subject to amortization.


(c)	Patents in Process consist of capitalized external legal and other registration costs in connection with internally developed tissue-based patents that are pending. Once issued, the costs associated with a given patent will be included in Patents & Know-How under intangible assets subject to amortization.

Estimated future amortization expense for intangible assets

Expected future amortization of intangible assets as of September 30, 2014, is as follows:



Year ending December 31,	Estimated Amortization Expense
2014 (a)	$	232,306
2015	929,226
2016	929,226
2017	839,593
2018	829,626
Thereafter	6,192,323
	$	9,952,300

(a) Estimated amortization expense for the year ending December 31, 2014, includes only amortization to be recorded after September 30, 2014.