Quarterly report [Sections 13 or 15(d)]

Intangible Assets and Liabilities Other Than Goodwill

Intangible Assets and Liabilities Other Than Goodwill

6 Months Ended

Jun. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Liabilities Other Than Goodwill

As of June 30, 2025 and December 31, 2024 we had the following amounts related to intangible assets and liabilities other than goodwill:


	June 30, 2025						December 31, 2024
Intangible assets	Cost		Accumulated Amortization		Total		Cost		Accumulated Amortization		Total
Product certifications	$	777,465	$	(721,888)	$	55,577	$	777,465	$	(709,855)	$	67,610
Patents	888,910		(631,592)		257,318		888,910		(584,493)		304,417
Developed technology	240,000		(196,000)		44,000		240,000		(188,000)		52,000
Trademarks	26,896		—		26,896		26,896		—		26,896
In Process R&D	263,936		(160,247)		103,689		263,936		(141,394)		122,542
Favorable contract asset	384,465		(381,690)		2,775		384,465		(379,839)		4,626
Customer contracts	2,225,123		(384,419)		1,840,704		2,225,123		(290,025)		1,935,098
	$	4,806,795	$	(2,475,836)	$	2,330,959	$	4,806,795	$	(2,293,606)	$	2,513,189

Intangible liability
Unfavorable contract liability	$	2,618,168	$	(2,259,127)	$	359,041	$	2,618,168	$	(2,195,329)	$	422,839

The aggregate amortization expense related to non-contract related intangible assets were $42,273 and $85,984 and $50,353 and $103,348 for the three and six months ended June 30, 2025 and 2024, respectively. The net aggregate expense (credit) related to the amortization of the contract related intangible assets and liabilities for the three and six months ended June 30, 2025 and 2024 were $18,398 and $32,448 and $2,024 and $(5,674), respectively.

Contract Related Intangibles

The favorable contract asset and unfavorable contract liability in the foregoing table represent the fair value of ADGE's customer contracts (both positive for favorable contracts and negative for unfavorable contracts) which were acquired by us on May 18, 2017. The customer contract asset includes the maintenance services contracts acquired by us on April 1, 2023 as part of the Aegis acquisition and pursuant to the February 2024 Amendment and the May 2024 Amendment. See" Note 7. Aegis Contract and Related Asset Acquisitions."

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 one year to eleven years, and is charged against either administrative expenses or cost of sales in the accompanying condensed consolidated statement of operations. Aggregate future amortization over the next five years is estimated to be as follows:


	Non-contract Related Intangibles		Contract Related Intangibles		Total
Year 1	$	168,137	$	107,141	$	275,278
Year 2	167,954		127,411		295,365
Year 3	95,470		136,329		231,799
Year 4	14,395		137,208		151,603
Year 5	5,650		137,743		143,393
Thereafter	8,978		838,606		847,584
Total	$	460,584	1,484,438		$	1,945,022