Note 2 – Intangible Assets

Intangible assets as of September 30, 2020 and December 31, 2019 consisted of the following:

Amortization expense was $198,832 for both three months ended September 30, 2020 and 2019, and $596,496 for both nine months ended September 30, 2020 and 2019. Amortization expense is included within research and development expense in the accompanying condensed consolidated statements of operations. Our estimated annual amortization expense in future periods will be approximately $790,000 per year.

The capitalized costs for the license rights to PCS499 included the $8 million purchase price, $1,782 in transaction costs and $3,037,147 associated with the initial recognition of an offsetting deferred tax liability related to the acquired temporary difference for an asset purchased that is not a business combination and has a tax basis of $1,782 in accordance with ASC 740-10-25-51 Income Taxes. In accordance with ASC Topic 730, Research and Development, we capitalized the costs of acquiring the exclusive license rights to PCS499, as the exclusive license rights represent intangible assets to be used in research and development activities that management believes has future alternative uses.