Quarterly report pursuant to Section 13 or 15(d)

Note 9 - Patents

v3.8.0.1
Note 9 - Patents
3 Months Ended
Mar. 31, 2018
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]
 NOTE 
9
 — PATENTS
 
Patents at
March 31, 2018
and
December 31, 2017
are comprised of the following:
 
 
2018
 
2017
 
 
Cost
 
Accumulated Amortization
 
Net
 
Cost
 
Accumulated Amortization
   
Net
 
Patents-foundation intellectual property
$
1,377,863
  $
(805,216
) $
572,647
  $
1,377,863
  $
(787,821
)   $
590,042
 
Epidural-Apad acquired patents
 
2,639,647
   
(659,912
)  
1,979,735
   
2,639,647
   
(439,941
)    
2,199,706
 
Total
$
4,017,510
  $
(1,465,128
) $
2,552,382
  $
4,017,510
  $
(1,227,762
)   $
2,789,748
 
 
Patents are amortized utilizing the straight-line method over estimated useful lives ranging from
3
 to
20
years, with a weighted average amortization period of approximately
5
 years.
 
On
July 13, 2017,
Milestone Scientific consummated a Asset Purchase Agreement (the “Agreement”) with APAD Octrooi B.V. and APAD B.V. (each, a “Seller” and collectively, the “Sellers”) pursuant to which Milestone Scientific acquired certain patent rights and other intellectual property rights related to the Sellers’ computer-controlled injection instrument (the “Purchased Assets”) and has been accounted for as an asset acquisition. On the closing date, Milestone Scientific issued to the Sellers an aggregate of
1,646,358
shares of its common stock, valued at approximately
$2,486,000
for the Purchased Assets which shares are subject to certain post-closing upward or downward adjustments
not
to exceed
twenty-five
percent of the initial shares as of the purchase date or
250,000
Euros, as defined in the agreement. As of
March 31, 2018,
and
December 31, 2017,
Milestone Scientific has recorded a liability of
$295,000
relating to the estimated additional shares that would have to be issued according this provision in the Agreement. The asset purchase price of approximately
$2,639,000,
net of expenses has been capitalized and will amortized over their
three
-year estimated useful life.
 
 
Amortization expense was
$237,366
and
$17,682
for the
three
months ended
March 31, 2018
and
2017,
respectively. The annual amortization expense expected to be recorded for existing intangibles assets for the next
five
years from the balance sheet date of
March 31, 2018
are as follows:
$927,000,
$920,000,
$259,000,
$39,000
and
$39,000,
respectively.