PATENT, CONTINGENT NOTE PAYABLE AND CONTINGENT COMPENSATION	9 Months Ended
Sep. 30, 2011
PATENT, CONTINGENT NOTE PAYABLE AND CONTINGENT COMPENSATION	7. PATENT, CONTINGENT NOTE PAYABLE AND CONTINGENT COMPENSATION On September 10, 2009, ASRI purchased a patent for a needle destruction device known as the Disintegrator® (including trademarks for the Disintegrator®, Disintegrator Plus® and Disintegrator Pro®) and other assets from Safeguard Medical Technologies, LLC (“Safeguard” or the “Seller”), in exchange for 250,000,000 shares of the Company’s common stock (1,250,000 shares after consideration of the 200-to-1 reverse stock split) and assumption of a contingent note payable up to $1,200,000. Accordingly, the Company recorded the patent at $2,652,272 equivalent to the trading value of common stock at the closing bid price on September 10, 2009, in the amount of $1,875,000 and the discounted amount of a $1,200,000 assumed contingent note payable in the amount of $777,272. On December 31, 2010, the Company recorded a patent impairment charge of $1,749,664 to write-down the carrying value of the patent to $639,138, representing the present value of expected future cash flows over the remaining life of the patent. For the nine months ended September 30, 2011 and 2010, amortization expense amounted to $41,987 and $158,082, respectively. As of September 30, 2011, the carrying value of the patent was $597,151. The assumed $1.2 million, non-interest bearing, contingent note is payable to a party related to the Seller in two installments upon reaching certain targets. The first installment of $600,000 is payable upon the Company reaching $6,000,000 in combined new capital and revenue from sales of the Disintegrator Plus® and certain other products introduced by the Seller within two (now three) years of September 10, 2009. The second installment of $600,000 is payable upon the Company reaching an additional $4,000,000 of combined new capital and revenue within two years of the due date of the first installment. At the Company’s option, the first and second installments may each be paid over 12 months after achievement of the respective combined capital and revenue targets. As it is probable that the Company will reach the combined capital and revenue targets within four (now five) years, the $1.2 million note obligation has been recognized at a discount. Subsequent changes to the Company’s estimate of the amount due on this contingent note payable will be recorded in the Company’s financial statements when known. During the nine months ended September 30, 2011 and 2010, the Company recognized $61,091 and $108,156 of interest expense related to amortization of this contingent note payable, respectively. On July 26, 2011, the Company issued 500,000 common shares to a party related to the Seller in exchange for a $200,000 reduction of principal on the first $600,000 installment of the contingent note. The value of the common stock on the effective date of the principal reduction was $120,000. Therefore the Company recognized a gain in the amount of $80,000. As the party related to the Seller is now deemed a related party to the Company, the gain was accounted for as an adjustment to additional paid in capital. The total amount due on the contingent note assuming all targets are met is now $1,000,000 and the carrying value of the contingent note payable is $857,791 as of September 30, 2011. Simultaneous with the patent acquisition, the Company agreed to hire an executive and majority owner of the Seller to assist with operations, sales and marketing, and entered into a ten year employment agreement with the executive (See Note 10 – Commitments and Contingencies), and retain the Seller for production, engineering and quality control services. In consideration for entering into the employment agreement and other agreements with the Seller, the Company agreed to issue up to 250,000,000 warrants (1,250,000 warrants after consideration of the 200-to-1 reverse stock split) and pay up to $200,000 as a cash bonus, both contingent upon future sales of the Disintegrator® and certain other products, to the executive and majority owner of the Seller. Management determined that the contingent warrants and contingent bonus payable qualified for treatment as contingent compensation for accounting purposes. Subsequent changes to the Company’s estimate of the total amount of compensation due will be recorded in the Company’s financial statements when known. As it is probable that the Company will reach $7.0 million in sales over the next three (now four) years, the Company currently anticipates the issuance of 100,000,000 warrants (500,000 warrants after consideration of the 200-to-1 reverse stock split), which were determined to have a fair value of $759,925 as of September 10, 2009. In accordance with ASC No. 718-10, Compensation – Stock Compensation, the Company is recording monthly compensation expense for the fair value of the warrants payable. For the nine months ended September 30, 2011 and 2010, the Company recorded $120,717 and $189,981, respectively, as compensation expense with an offset to additional paid in capital. Since inception, total charges to compensation expense for this contingent compensation have amounted to $451,426. The Company will adjust the total amount of recorded compensation expense as recorded in the consolidated financial statements upon the occurrence of an event which would indicate a change to the level of the achievable sales. As it is probable that the Company will reach $7.0 million in sales over three (now four) years, the Seller is entitled to a $100,000 cash bonus, which was deemed to have a present value of $64,066 on September 10, 2009. The Company is accruing monthly compensation expense for the anticipated full amount of the bonus payable on a straight-line basis over the three (now four) year period that the services are to be performed. During the nine months ended September 30, 2011 and 2010, the Company recognized $15,885 and $25,000, respectively, as compensation expense related to this liability for contingent compensation, raising the balance to $59,405 as of September 30, 2011. On March 9, 2011, the Company’s Board of Directors agreed to extend the deadlines for meeting the measurement dates for determining the triggers for the $1.2 million contingent note to Safeguard and the warrants and cash bonus payable to the executive, for one year. The first installment on the $1.2 million contingent note of $600,000 (adjusted to $400,000 after issuance of 500,000 common shares in July 2011) is now payable upon the Company reaching $6,000,000 in combined new capital and revenue from sales of the Disintegrator Plus® and certain other products introduced by the Seller on or before September 10, 2012. The measurement date for issuance of up to 250,000,000 warrants (1,250,000 warrants after consideration of the 200-to-1 reverse stock split) and payment of up to $200,000 as a cash bonus to the executive and majority owner of Safeguard, both contingent upon future sales of the Disintegrator® and certain other products, has now been extended to four years, or September 10, 2013. These extensions are currently not expected to affect the total amount of the Company’s accrual for such note and compensation obligations. Effective January 1, 2011, the Company extended the period over which the contingent note and compensation obligations are being amortized.

7. PATENT, CONTINGENT NOTE PAYABLE AND CONTINGENT COMPENSATION

On September 10, 2009, ASRI purchased a patent for a needle destruction device known as the Disintegrator® (including trademarks for the Disintegrator®, Disintegrator Plus® and Disintegrator Pro®) and other assets from Safeguard Medical Technologies, LLC (“Safeguard” or the “Seller”), in exchange for 250,000,000 shares of the Company’s common stock (1,250,000 shares after consideration of the 200-to-1 reverse stock split) and assumption of a contingent note payable up to $1,200,000. Accordingly, the Company recorded the patent at $2,652,272 equivalent to the trading value of common stock at the closing bid price on September 10, 2009, in the amount of $1,875,000 and the discounted amount of a $1,200,000 assumed contingent note payable in the amount of $777,272. On December 31, 2010, the Company recorded a patent impairment charge of $1,749,664 to write-down the carrying value of the patent to $639,138, representing the present value of expected future cash flows over the remaining life of the patent. For the nine months ended September 30, 2011 and 2010, amortization expense amounted to $41,987 and $158,082, respectively. As of September 30, 2011, the carrying value of the patent was $597,151.

The assumed $1.2 million, non-interest bearing, contingent note is payable to a party related to the Seller in two installments upon reaching certain targets. The first installment of $600,000 is payable upon the Company reaching $6,000,000 in combined new capital and revenue from sales of the Disintegrator Plus® and certain other products introduced by the Seller within two (now three) years of September 10, 2009. The second installment of $600,000 is payable upon the Company reaching an additional $4,000,000 of combined new capital and revenue within two years of the due date of the first installment. At the Company’s option, the first and second installments may each be paid over 12 months after achievement of the respective combined capital and revenue targets. As it is probable that the Company will reach the combined capital and revenue targets within four (now five) years, the $1.2 million note obligation has been recognized at a discount. Subsequent changes to the Company’s estimate of the amount due on this contingent note payable will be recorded in the Company’s financial statements when known. During the nine months ended September 30, 2011 and 2010, the Company recognized $61,091 and $108,156 of interest expense related to amortization of this contingent note payable, respectively.

On July 26, 2011, the Company issued 500,000 common shares to a party related to the Seller in exchange for a $200,000 reduction of principal on the first $600,000 installment of the contingent note. The value of the common stock on the effective date of the principal reduction was $120,000. Therefore the Company recognized a gain in the amount of $80,000. As the party related to the Seller is now deemed a related party to the Company, the gain was accounted for as an adjustment to additional paid in capital. The total amount due on the contingent note assuming all targets are met is now $1,000,000 and the carrying value of the contingent note payable is $857,791 as of September 30, 2011.

Simultaneous with the patent acquisition, the Company agreed to hire an executive and majority owner of the Seller to assist with operations, sales and marketing, and entered into a ten year employment agreement with the executive (See Note 10 – Commitments and Contingencies), and retain the Seller for production, engineering and quality control services. In consideration for entering into the employment agreement and other agreements with the Seller, the Company agreed to issue up to 250,000,000 warrants (1,250,000 warrants after consideration of the 200-to-1 reverse stock split) and pay up to $200,000 as a cash bonus, both contingent upon future sales of the Disintegrator® and certain other products, to the executive and majority owner of the Seller. Management determined that the contingent warrants and contingent bonus payable qualified for treatment as contingent compensation for accounting purposes. Subsequent changes to the Company’s estimate of the total amount of compensation due will be recorded in the Company’s financial statements when known.

As it is probable that the Company will reach $7.0 million in sales over the next three (now four) years, the Company currently anticipates the issuance of 100,000,000 warrants (500,000 warrants after consideration of the 200-to-1 reverse stock split), which were determined to have a fair value of $759,925 as of September 10, 2009. In accordance with ASC No. 718-10, Compensation – Stock Compensation, the Company is recording monthly compensation expense for the fair value of the warrants payable. For the nine months ended September 30, 2011 and 2010, the Company recorded $120,717 and $189,981, respectively, as compensation expense with an offset to additional paid in capital. Since inception, total charges to compensation expense for this contingent compensation have amounted to $451,426. The Company will adjust the total amount of recorded compensation expense as recorded in the consolidated financial statements upon the occurrence of an event which would indicate a change to the level of the achievable sales.

As it is probable that the Company will reach $7.0 million in sales over three (now four) years, the Seller is entitled to a $100,000 cash bonus, which was deemed to have a present value of $64,066 on September 10, 2009. The Company is accruing monthly compensation expense for the anticipated full amount of the bonus payable on a straight-line basis over the three (now four) year period that the services are to be performed. During the nine months ended September 30, 2011 and 2010, the Company recognized $15,885 and $25,000, respectively, as compensation expense related to this liability for contingent compensation, raising the balance to $59,405 as of September 30, 2011.

On March 9, 2011, the Company’s Board of Directors agreed to extend the deadlines for meeting the measurement dates for determining the triggers for the $1.2 million contingent note to Safeguard and the warrants and cash bonus payable to the executive, for one year. The first installment on the $1.2 million contingent note of $600,000 (adjusted to $400,000 after issuance of 500,000 common shares in July 2011) is now payable upon the Company reaching $6,000,000 in combined new capital and revenue from sales of the Disintegrator Plus® and certain other products introduced by the Seller on or before September 10, 2012. The measurement date for issuance of up to 250,000,000 warrants (1,250,000 warrants after consideration of the 200-to-1 reverse stock split) and payment of up to $200,000 as a cash bonus to the executive and majority owner of Safeguard, both contingent upon future sales of the Disintegrator® and certain other products, has now been extended to four years, or September 10, 2013. These extensions are currently not expected to affect the total amount of the Company’s accrual for such note and compensation obligations. Effective January 1, 2011, the Company extended the period over which the contingent note and compensation obligations are being amortized.