7.	Intangible assets and royalty agreement

Intangible assets activity is summarized as follows:

		December 31, 2011							December 31, 2010
	Weighted Average Amortization Lives	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intangible assets subject to amortization:
License-Shriners Hsp for Children & USF Research (a)	10 years	$	996,000	$	(488,033	)	$	507,967	$	996,000	$	(388,433	)	$	607,567
License - SaluMedica LLC Spine Repair (b)	10 years		2,399,000		(1,313,573	)		1,085,427		2,399,000		(1,017,557	)		1,381,443
License - Polyvinyl Alcohol Cryogel (c)	10 years		2,667,000		(998,932	)		1,668,068		2,667,000		(726,616	)		1,940,384
Customer Relationships (d)	14 years		3,520,000		(251,429	)		3,268,571		-		-			-
Supplier Relationships (d)	14 years		241,000		(17,215	)		223,785		-		-			-
Patents & Know-How (d)	14 years		5,530,000		(395,000	)		5,135,000		-		-			-
Licenses/Permits (d)	3 years		13,000		(4,333	)		8,667		-		-			-
			15,366,000		(3,468,515	)		11,897,485		6,062,000		(2,132,606	)		3,929,394

Trade Names/Trademarks (d)	indefinite		1,008,000		-			1,008,000		-		-			-
In-process Research & Development-Liquid (d)	indefinite		2,160,000		-			2,160,000		-		-			-
In-process Research & Development-Other (d)	indefinite		25,000		-			25,000		-		-			-
		$	18,559,000	$	(3,468,515	)	$	15,090,485	$	6,062,000	$	(2,132,606	)	$	3,929,394

(a)

On January 29, 2007, the Company acquired a license from Shriner's Hospitals for Children and University of South Florida Research Foundation, Inc. which is further discussed in Note 1. The acquisition price of this license was a one-time fee of $100,000 and 1,120,000 shares of common stock valued at $896,000 (based upon the estimated fair value of the common stock on the transaction date). Within thirty 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. This amount is not recorded as a liability as of December 31, 2009 or 2010, based on its contingent nature. The Company will also be required to pay a royalty of 3% on all commercial sales revenue of the licensed products.

(b)	License from SaluMedica, LLC (SaluMedica) for the use of certain developed technologies related to spine repair. This license was acquired through the acquisition of SpineMedica Corp.

(c)

On March 31, 2008, the Company entered into a license agreement for the use of certain developed technologies related to surgical sheets made of polyvinyl alcohol cryogel. The acquisition price of the asset was 400,000 shares of common stock valued at $2,596,000 (based upon the closing price of the common stock on the transaction date). The agreement also provides for the issuance of an additional 600,000 shares upon the Company meeting certain milestones related to future sales. On December 31, 2009 the Company completed the sale of its first commercial product and met its first milestone under this agreement. As a result the Company issued 100,000 shares of common stock to the licensor valued at $71,000. At December 31, 2011 or 2010, there are no additional amounts accrued for this obligation due to its contingent nature.

(d)

On January 5, 2011, the Company acquired the equity interests of Surgical Biologics, LLC which is further discussed in Notes 1 and 4. An appraisal of the fair value of certain identified intangible assets of Surgical Biologics acquired by the Company was performed in accordance with ASC 805 as of the date of acquisition.

Expected future amortization of intangible assets is as follows:

	Estimated
	Amortization
Year ending December 31,	Expense
2012	$	1,335,909
2013		1,335,909
2014		1,331,575
2015		1,225,337
2016		1,024,843
Thereafter		5,643,912
	$	11,897,485