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, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Liabilities Other Than Goodwill

As of March 31, 2024 and December 31, 2023 we had the following amounts related to intangible assets and liabilities other than goodwill:


	March 31, 2024						December 31, 2023
Intangible assets	Cost		Accumulated Amortization		Total		Cost		Accumulated Amortization		Total
Product certifications	$	777,465	$	(675,397)	$	102,068	$	777,465	$	(658,676)	$	118,789
Patents	888,910		(518,731)		370,179		888,910		(496,807)		392,103
Developed technology	240,000		(176,000)		64,000		240,000		(172,000)		68,000
Trademarks	26,896		—		26,896		26,896		—		26,896
In Process R&D	263,936		(113,115)		150,821		263,936		(103,689)		160,247
Favorable contract asset	384,465		(377,063)		7,402		384,465		(376,138)		8,327
Customer contracts	1,962,298		(150,552)		1,811,746		1,772,659		(110,791)		1,661,868
	$	4,543,970	$	(2,010,858)	$	2,533,112	$	4,354,331	$	(1,918,101)	$	2,436,230

Intangible liability
Unfavorable contract liability	$	2,618,168	$	(2,066,580)	$	551,588	$	2,618,168	$	(2,019,122)	$	599,046

The aggregate amortization expense related to intangible assets and liabilities exclusive of contract related intangibles for the three months ended March 31, 2024 and 2023 was $92,756 and $49,361. 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, 2024 and 2023 was $47,459 and $60,933, respectively

Contract and Non-Contracted Related Intangibles

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. The customer contract asset includes the maintenance contracts acquired by us on April 1, 2023 and February 1, 2024, as part of the Aegis acquisition (see Note 7. "Aegis Contract and Related Asset Acquisition.")

Amortization of intangibles including contract related amounts is calculated using the straight-line method over the remaining useful life or contract term, which range from approximately 1-11 years, and is charged against cost of sales and general & administrative expenses in the accompanying consolidated statement of operations. Aggregate future amortization over the next five years and thereafter as of March 31, 2024 is estimated to be as follows:


	Non-contract Related Intangibles		Contract Related Intangibles		Total
Year 1	$	183,995	$	1,883	$	185,878
Year 2	168,489		67,329		235,818
Year 3	162,381		102,012		264,393
Year 4	138,362		109,678		248,040
Year 5	20,621		113,122		133,743
Thereafter	20,620		866,136		886,756
Total	$	694,468	1,260,160		$	1,954,628