Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets and Liabilities Other Than Goodwill

v3.8.0.1
Intangible Assets and Liabilities Other Than Goodwill
 3 Months Ended
Mar. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Liabilities Other Than Goodwill
Intangible Assets and Liabilities Other Than Goodwill

As of March 31, 2018 and December 31, 2017 the Company had the following amounts related to intangible assets and liabilities other than goodwill:
 
 
March 31, 2018
 
December 31, 2017
Intangible assets
 
Cost
 
Accumulated Amortization
 
Total
 
Cost
 
Accumulated Amortization
 
Total
Product certifications
 
$
651,639

 
$
(298,874
)
 
$
352,765

 
$
605,704

 
$
(285,341
)
 
$
320,363

Patents
 
844,309

 
(162,343
)
 
681,966

 
808,323

 
(154,972
)
 
653,351

Developed technology
 
240,000

 
(80,000
)
 
160,000

 
240,000

 
(76,000
)
 
164,000

Trademarks
 
20,540

 
—

 
20,540

 
19,540

 
—

 
19,540

In Process R&D
 
263,936

 
—

 
263,936

 
263,001

 
—

 
263,001

Favorable contract asset
 
1,561,739

 
(122,194
)
 
1,439,545

 
1,561,739

 
(85,536
)
 
1,476,203

 
 
$
3,611,770

 
$
(663,411
)
 
$
2,948,359

 
$
3,498,307

 
$
(601,849
)
 
$
2,896,458

 
 
 
 
 
 
 
 
 
 
 
 
 
Intangible liability
 
 
 
 
 
 
 
 
 
 
 
 
Unfavorable contract liability
 
$
8,341,922

 
$
(876,972
)
 
$
7,464,950

 
$
8,341,922

 
$
(612,255
)
 
$
7,729,667


The aggregate amortization expense related to intangible assets and liabilities exclusive of contract related intangibles for the three months ended March 31, 2018 and 2017 was $24,903 and $24,828, respectively. The net credit to cost of sales related to the amortization of contract related intangible assets and liabilities for the three months ended March 31, 2018 and 2017 was $228,059 and $0, respectively.

Favorable/Unfavorable Contract Assets and Liabilities

The favorable contract asset and unfavorable contract liability in the foregoing table represent the estimated fair value of American DG Energy's customer contracts (both positive for favorable contracts and negative for unfavorable contracts) which were acquired by the Company on May 18, 2017 (see Note 4. Acquisition of American DG Energy Inc.).

Amortization of intangibles including contract related amounts is calculated using the straight line method over the remaining useful life or contract term. Aggregate future amortization over the next five years is estimated to be as follows:
Year 1
 
$
(628,543
)
Year 2
 
(517,196
)
Year 3
 
(524,276
)
Year 4
 
(535,463
)
Year 5
 
(494,180
)