GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2013

GOODWILL AND INTANGIBLE ASSETS

Goodwill

As a result of the Merger (Note 2), the Company recorded goodwill of $1,838,309. The Company conducts an impairment test of goodwill on an annual basis as of October 31 of each year. The Company also conduct tests if events occur or circumstances change that would, more likely than not, reduce the fair value of the Company below its carrying value. No such triggering events were identified during the period from the date of the Merger to June 30, 2013 and therefore no impairment loss was recognized as of June 30, 2013.

Intangible Assets

The components of net intangible assets are as follows:

	June 30, 2013				December 31, 2012
	Gross Carrying		Accumulated		Gross Carrying			Accumulated	Amortization
	Amount		Amortization		Amount		Amortization		Period
Acquired ANDA intangible asset	$	60,000	$	-	$	60,000	$	-		3 years
Reglan® intangible asset		100,000		(100,000)		100,000		(75,000)		2 years
Teva license intangible asset		10,900,000		-		-		-		11 years
	$	11,060,000	$	(100,000)	$	160,000	$	(75,000)

Intangible assets are stated at the lower of cost or fair value, net of amortization using the straight line method over the expected useful lives of the product rights, once the related products begin to sell. Amortization expense was $12,500 for each of the three-month periods ended June 30, 2013 and 2012. Amortization expense was $25,000 for each of the six-month periods ended June 30, 2013 and 2012. Amortization expense relating to the Teva license intangible asset for the period from date of the Merger to June 30, 2013 was insignificant.

The Company tests for impairment of intangible assets as of October 31 of each year and when events or circumstances indicate that the carrying value of the assets may not be recoverable. No such triggering events were identified during the period from the date of the Merger to June 30, 2013 and therefore no impairment loss was recognized as of June 30, 2013.

Expected future amortization expense is as follows:

2013	$	495,455	(remainder of year)
2014		997,577
2015		1,010,910
2016		1,010,910
2017		1,004,243
2018 and thereafter		6,440,905
Total	$	10,960,000

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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