PATENT RIGHTS AND INTANGIBLE ASSETS

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements

PATENT RIGHTS AND INTANGIBLE ASSETS

On April 26, 2010, the Company acquired from an officer and shareholder the technical contributions and assignment of all exclusive rights to and for the SampleMD patent currently in process in exchange for 300,000 shares of common stock to be granted at the discretion of the seller in addition to 200,000 stock options valued at $360,000. The shares were valued on the grant date at $570,000 and have been recorded as a payable to the related party.

The Company has capitalized costs in purchasing the SampleMD patent, which consisted of the following as of September 30, 2011 and December 31, 2010:

	September 30, 2011			December 31, 2010
Patent rights and intangible assets	$	930,000		$	930,000
Accumulated amortization		(68,382	)		(27,353	)
Patent rights and intangible assets, net	$	861,618		$	902,647

The Company began amortizing the patent, using the straight-line method over the estimated useful life of 17 years, once it was put into service in July 2010. Amortization expense was $41,029 for the nine months ended September 30, 2011 and $27,353 for the year ended December 31, 2010, respectively.