Note 4 – Patents

Costs of establishing patents, consisting of legal and filing fees paid to third parties, are expensed as incurred. The fair value of the Zertane patents, determined by an independent, third party appraisal to be $500,000, was being amortized over the remaining U.S. patent life of approximately 11 years from the date of Aytu’s acquisition of the patents. As of June 30, 2016, Aytu determined that this asset had no value because the Company was directing its resources towards its commercial-stage products, and therefore, Aytu did not have the resources to complete the necessary clinical trials and bring Zertane to market before the patents expire. The remaining fair value of the Zertane patents were expensed as of June 30, 2016.

The cost of the oxidation reduction potential (“ORP”) related patents was $380,000 when they were acquired and are being amortized over the remaining U.S. patent life of approximately 15 years as of the date Aytu acquired it. Patents consist of the following:

	As of March 31,		As of June 30,
	2017		2016

Patents	$	880,000	$	880,000
Less accumulated amortization		(602,000)		(583,000)
Patents, net	$	278,000	$	297,000

The amortization expense was as follows:

	Three Months Ended March 31,				Nine Months Ended March 31,
	2017		2016		2017		2016

Amortization expense	$	6,000	$	18,000	$	19,000	$	53,000