Quarterly report [Sections 13 or 15(d)]

Intangible Assets and Liabilities Other Than Goodwill

Intangible Assets and Liabilities Other Than Goodwill

9 Months Ended

Sep. 30, 2025

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Liabilities Other Than Goodwill

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


	September 30, 2025						December 31, 2024
Intangible assets	Cost		Accumulated Amortization		Total		Cost		Accumulated Amortization		Total
Product certifications	$	777,465	$	(727,178)	$	50,287	$	777,465	$	(709,855)	$	67,610
Patents	888,910		(659,561)		229,349		888,910		(584,493)		304,417
Developed technology	240,000		(200,000)		40,000		240,000		(188,000)		52,000
Trademarks	26,896		—		26,896		26,896		—		26,896
In Process R&D	263,936		(169,673)		94,263		263,936		(141,394)		122,542
Favorable contract asset	384,465		(382,615)		1,850		384,465		(379,839)		4,626
Customer contracts	2,225,123		(431,617)		1,793,506		2,225,123		(290,025)		1,935,098
	$	4,806,795	$	(2,570,644)	$	2,236,151	$	4,806,795	$	(2,293,606)	$	2,513,189

Intangible liability
Unfavorable contract liability	$	2,618,168	$	(2,285,181)	$	332,987	$	2,618,168	$	(2,195,329)	$	422,839

The aggregate amortization expense related to non-contract related intangible assets were $46,686 and $132,670 and $46,127 and $149,476 for the three and nine months ended September 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 nine months ended September 30, 2025 and 2024 were $22,069 and $54,517 and $6,015 and $342, 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 as of September 30, 2025:


	Non-contract Related Intangibles		Contract Related Intangibles		Total
Year 1	$	166,345	$	117,041	$	283,386
Year 2	165,584		128,865		294,449
Year 3	58,732		137,208		195,940
Year 4	10,022		137,208		147,230
Year 5	5,650		141,771		147,421
Thereafter	7,566		800,276		807,842
Total	$	413,899	1,462,369		$	1,876,268