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Intellectual Property and License Agreement
 6 Months Ended
Jun. 30, 2016
Business Combinations [Abstract]  
Intellectual Property and License Agreement

Note 5 – Intellectual Property and License Agreement

 

Intellectual Property partially consists of technology acquired from the purchase of 100% of the membership interests of Cornerstone Conservation Group LLC (“Cornerstone”) on March 30, 2012 for $659,440. Accumulated amortization with respect to this intellectual property was $659,440 at June 30, 2016.

 

On June 30, 2015, the Company entered into an Assignment Agreement with VyrexIP Holdings Inc., a company owned by Company shareholder Edward Gomez, for the purchase of intellectual property. The net price of these assets was comprised of a down payment of $16,116 and a $58,436 promissory note to the seller due July 15, 2016, partially offset by assignment by the seller to the Company of a $38,000 promissory note due November 14, 2015, issued by the seller’s licensee Epalex Corporation, a company of which Mr. Gomez is chairman and a major stockholder. This note was paid in full as of March 31, 2016. Accumulated amortization with respect to this intellectual property was $12,184 at June 30, 2016.

 

On June 1, 2016, the Company entered into a ten year License Agreement with Helidyne LLC to utilize the Helidyne intellectual property in the manufacturing of planetary rotor expanders and the incorporation of same in the Company’s distributed electric power generation systems. The license agreement also grants the Company an exclusive license to sell the expanders whether manufactured by Helidyne or by the Company. The Company’s royalty obligation begins on the earlier of the commercialization of the product or three years from the effective date of the agreement. Once the royalty obligation begins, the minimum annual royalty is $50,000 for the first six years, and $100,000 for the remainder of the agreement.

 

The license acquisition fee of $100,000 is to be paid in four consecutive monthly installments beginning June 1, 2016. As of June 30, 2016, the $75,000 unpaid balance of the license acquisition fee is reflected on the condensed consolidated financial statement as a Note Payable with final payment being due September 1, 2016. The license acquisition fee is being amortized over a ten year period. The expense for the three months ended June 30, 2016, was $822.

 

For the six months ended June 30, 2016 and 2015, amortization expense was $6,914 and $54,953, respectively, and accumulated amortization of the intangible assets of intellectual property and license agreement was $672,446 at June 30, 2016.

 

Future amortization of the intangible assets of intellectual property and license agreement was as follows as of June 30, 2016:

 

Year ending December 31:      
  2016   $   11,092
  2017       22,184
  2018       12,374
  2019       10,000
  2020       10,000
  Thereafter       54,178
Total   $ 119,828