NOTE 6 – PATENT AND TRADEMARKS

On April 26, 2010, the Company acquired the technical contributions and assignment of all exclusive rights to and for a key patent from an officer and shareholder in exchange for 300,000 shares of common stock to be granted at the discretion of the seller and 200,000 stock options, which expired in April 2015, that were 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 and defending its patent, which consisted of the following as of December 31, 2015 and 2014:

	2015			2014
Patent rights and intangible assets	$	930,000		$	930,000
Patent defense costs		172,457			170,937
New patents and trademarks		58,469			90,202
Accumulated amortization		(328,042	)		(260,285	)
Patent rights and intangible assets, net	$	832,884		$	930,854

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. In 2013, the Company began incurring costs related to defense of the patent. These costs have been capitalized and will be amortized using the straight-line method over the remaining useful life of the original patent. Amortization expense was $67,758 and $65,647 for the years ended December 31, 2015 and 2014, respectively.