Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets and Liabilities Other Than Goodwill

Intangible Assets and Liabilities Other Than Goodwill

9 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Liabilities Other Than Goodwill

As of September 30, 2021 and December 31, 2020 we had the following amounts related to intangible assets and liabilities other than goodwill:


	September 30, 2021						December 31, 2020
Intangible assets	Cost		Accumulated Amortization		Total		Cost		Accumulated Amortization		Total
Product certifications	$	765,850	$	(519,083)	$	246,767	$	726,159	$	(478,357)	$	247,802
Patents	864,273		(291,664)		572,609		855,014		(220,764)		634,250
Developed technology	240,000		(136,000)		104,000		240,000		(124,000)		116,000
Trademarks	26,896		—		26,896		26,896		—		26,896
In Process R&D	263,936		(18,853)		245,083		263,936		—		263,936
Favorable contract asset	384,465		(345,773)		38,692		384,465		(313,030)		71,435

	$	2,545,420	$	(1,311,373)	$	1,234,047	$	2,496,470	$	(1,136,151)	$	1,360,319

Intangible liability
Unfavorable contract liability	$	2,534,818	$	(1,185,926)	$	1,348,892	$	2,534,818	$	(917,767)	$	1,617,051

The aggregate amortization expense related to intangible assets and liabilities exclusive of contract related intangibles for the three and nine months ended September 30, 2021 and 2020 was $51,229 and $145,306 and $21,564 and $64,692 respectively. The net credit to cost of sales related to the amortization of contract related intangible assets and liabilities for the nine months ended September 30, 2021 and 2020 was $79,570 and $238,192 and $98,053 and $301,414, respectively. During

the nine months ended September 30, 2021 and 2020, we abandoned certain patent applications amounting to $7,400 and $179,944, respectively, and recorded an abandonment charge in general and administrative expenses in each respective period.

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 us in May 2017.

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 and thereafter as of September 30, 2021 is estimated to be as follows:


	Non-contract Related Intangibles		Contract Related Intangibles		Total
Year 1	$	204,679	$	(323,761)	$	(119,082)
Year 2	199,576		(269,825)		(70,249)
Year 3	182,373		(217,757)		(35,384)
Year 4	173,803		(151,920)		21,883
Year 5	169,787		(90,035)		79,752
Thereafter	254,896		(273,557)		(18,661)
Total	$	1,185,114	(1,326,855)		$	(141,741)