Quarterly report [Sections 13 or 15(d)]

Intangible Assets and Liabilities Other Than Goodwill

Intangible Assets and Liabilities Other Than Goodwill

3 Months Ended

Mar. 31, 2026

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Liabilities Other Than Goodwill

As of March 31, 2026 and December 31, 2025 we had the following amounts related to intangible assets and liabilities other than goodwill:


	March 31, 2026						December 31, 2025
Intangible assets	Cost		Accumulated Amortization		Total		Cost		Accumulated Amortization		Total
Product certifications	$	777,465	$	(737,754)	$	39,711	$	777,465	$	(732,469)	$	44,996
Patents	888,910		(705,183)		183,727		888,910		(682,370)		206,540
Developed technology	240,000		(208,000)		32,000		240,000		(204,000)		36,000
Trademarks	26,896		—		26,896		26,896		—		26,896
In Process R&D	263,936		(188,526)		75,410		263,936		(179,100)		84,836
Favorable contract asset	384,465		(384,465)		—		384,465		(383,540)		925
Customer contracts	2,225,123		(526,012)		1,699,111		2,225,123		(478,813)		1,746,310
	$	4,806,795	$	(2,749,940)	$	2,056,855	$	4,806,795	$	(2,660,292)	$	2,146,503

Intangible liability
Unfavorable contract liability	$	2,341,478	$	(2,148,943)	$	192,535	$	2,341,478	$	(2,136,143)	$	205,335

The aggregate amortization expense related to non-contract related intangible assets was $41,525 and $43,711 for the three months ended March 31, 2026 and 2025, respectively. The net aggregate expense related to the amortization of the contract related intangible assets and liabilities for the three months ended March 31, 2026 and 2025 was $35,323 and $14,050, 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 from March 31, 2026 is estimated to be as follows:


	Non-contract Related Intangibles		Contract Related Intangibles		Total
Year 1	$	165,723	$	146,897	$	312,620
Year 2	129,915		154,563		284,478
Year 3	18,768		158,007		176,775
Year 4	5,650		158,007		163,657
Year 5	5,649		170,624		176,273
Thereafter	5,143		718,478		723,621
Total	$	330,848	$	1,506,576	$	1,837,424