Intangible Assets and Royalty Agreement

Intangible assets are summarized as follows (in thousands):



	Weighted Average Amortization Lives	March 31, 2015			December 31, 2014
		Cost			Cost
Licenses (a) (b)	10 years	$	1,009		$	1,009
Patents & Know How (b)	17 years	7,893			7,891
Customer & Supplier Relationships (b)	14 years	3,761			3,761
Tradenames & Trademarks (b)	indefinite	1,008			1,008
In Process Research & Development (b)	n/a	25			25
Patents in Process (c)	n/a	1,281			1,082
Total		14,977			14,776
Less Accumulated amortization		(4,164		)	(3,931		)
Net		$	10,813		$	10,845

(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 March 31, 2015, this license had a remaining net book value of approximately $184,000.

(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 three months ended March 31, 2015 an additional $2,333 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.

Amortization expense for the three months ended March 31, 2015 and 2014, was approximately $233,000, and $231,000, respectively.

Expected future amortization of intangible assets as of March 31, 2015, is as follows (in thousands):



Year ending December 31,	Estimated Amortization Expense
2015 (a)	$	697
2016	929
2017	840
2018	830
2019	830
Thereafter	5,679
	$	9,805

(a) Estimated amortization expense for the year ending December 31, 2015, includes only amortization to be recorded after March 31, 2015.