General form of registration statement for all companies including face-amount certificate companies

Acquisition of patents

v3.3.1.900
Acquisition of patents
 6 Months Ended 12 Months Ended
Nov. 30, 2015
May. 31, 2015
Acquisition of patents

Note 10 – Acquisition of patents

As discussed in Note 6 above, the Company consummated an asset purchase on October 16, 2012, and paid $3,500,000 for certain assets, including intellectual property, certain related licenses and sublicenses, FDA filings and various forms of the PRO 140 drug substance. The Company followed the guidance in Financial Accounting Standards Topic 805 to determine if the Company acquired a business. Based on the prescribed accounting, the Company acquired assets and not a business. As of November 30, 2015 the Company has recorded $3,500,000 of intangible assets in the form of patents. The Company estimates the acquired patents have an estimated life of eight years. Subsequent to the acquisition date, the Company has continued to expand, amend and file new patents central to its current trial strategies, which in turn have extended the protection period for certain methods of using PRO 140 and formulations comprising PRO 140 out through at least 2026 and 2031, respectively, in various countries.

The following presents intangible assets activity:

 

     November 30, 2015      May 31, 2015  

Gross carrying amounts

    $ 3,500,000       $ 3,500,000   

Accumulated amortization

      (1,093,750 )       (918,750 ) 
  

 

 

     

 

 

  

Total amortizable intangible assets, net

      2,406,250         2,581,250   

Patents currently not amortized

      35,989         35,989   
  

 

 

     

 

 

  

Carrying value of intangibles, net

    $ 2,442,239       $ 2,617,239   
  

 

 

     

 

 

  

Amortization expense related to patents was approximately $87,500 and $175,000 for the three and six-months ended November 30, 2015 and 2014. The estimated aggregate future amortization expense related to the Company’s intangible assets with finite lives is estimated at approximately $350,000 per year for the next five years.

Note 13 – Acquisition of Patents

As discussed in Note 7 above, the Company consummated an asset purchase on October 16, 2012, and paid $3,500,000 for certain assets, including intellectual property, certain related licenses and sublicenses, FDA filings and various forms of the PRO 140 drug substance. The Company followed the guidance in Financial Accounting Standards Topic 805 to determine if the Company acquired a business. Based on the prescribed accounting, the Company acquired assets and not a business. As of May 31, 2015 and 2014, the Company has recorded $3,500,000 of intangible assets in the form of patents. The Company estimates the acquired patents have an estimated life of eight years. Subsequent to the acquisition date, the Company has continued to expand, amend and file new patents central to its current trial strategies, which in turn have extended the protection period for certain methods of using PRO 140 and formulations comprising PRO 140 out through at least 2026 and 2031, respectively, in various countries.

The following presents intangible assets activity:

 

     May 31, 2015      May 31, 2014  

Gross carrying amounts

    $ 3,500,000       $ 3,500,000   

Accumulated amortization

      (918,750 )       (568,750 ) 
  

 

 

     

 

 

  

Total amortizable intangible assets, net

      2,581,250         2,931,250   

Patents currently not amortized

      35,989         35,989   
  

 

 

     

 

 

  

Carrying value of intangibles, net

    $ 2,617,239       $ 2,967,239   
  

 

 

     

 

 

  

Amortization expense related to intangible patents was approximately $350,000 for the years ended May 31, 2015 and May 31, 2014. The estimated aggregate future amortization expense related to the Company’s intangible assets with finite lives is estimated at approximately $350,000 per year for the next five years.