Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets and Liabilities Other Than Goodwill

Intangible Assets and Liabilities Other Than Goodwill

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Liabilities Other Than Goodwill

As of March 31, 2022 and December 31, 2021 we had the following amounts related to intangible assets and liabilities other than goodwill:


	March 31, 2022						December 31, 2021
Intangible assets	Cost		Accumulated Amortization		Total		Cost		Accumulated Amortization		Total
Product certifications	$	777,465	$	(546,094)	$	231,371	$	765,850	$	(532,676)	$	233,174
Patents	875,626		(337,696)		537,930		871,021		(314,997)		556,024
Developed technology	240,000		(144,000)		96,000		240,000		(140,000)		100,000
Trademarks	26,896		—		26,896		26,896		—		26,896
In Process R&D	263,936		(37,705)		226,231		263,936		(28,279)		235,657
Favorable contract asset	384,465		(361,968)		22,497		384,465		(355,193)		29,272

	$	2,568,388	$	(1,427,463)	$	1,140,925	$	2,552,168	$	(1,371,145)	$	1,181,023

Intangible liability
Unfavorable contract liability	$	2,903,419	$	(1,791,664)	$	1,111,755	$	3,056,655	$	(1,797,149)	$	1,259,506

The aggregate amortization expense related to intangible assets and liabilities exclusive of contract related intangibles for the three months ended March 31, 2022 and 2021 was $50,795 and $42,890. The net credit to cost of sales related to the amortization of the contract related intangible asset and liability for the three months ended March 31, 2022 and 2021 was $70,526 and $79,053, 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 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 March 31, 2022 is estimated to be as follows:


	Non-contract Related Intangibles		Contract Related Intangibles		Total
Year 1	$	199,518	$	(288,741)	$	(89,223)
Year 2	195,929		(239,891)		(43,962)
Year 3	179,372		(147,725)		31,647
Year 4	175,602		(114,043)		61,559
Year 5	170,801		(79,359)		91,442
Thereafter	185,113		(234,302)		(49,189)
Total	$	1,106,335	(1,104,061)		$	2,274

We recognized a gain on termination of unfavorable contract liability of $71,375 in three months ended March 31, 2022 due to the closing of certain energy production sites.