XML 28 R17.htm IDEA: XBRL DOCUMENT v3.22.1
Intellectual Property, Net
 12 Months Ended
Dec. 31, 2021
Intellectual Property Net  
Intellectual Property, Net

Note 11. Intellectual Property, Net

 

The Company entered into a Contribution Agreement dated January 5, 2015, where proprietary information and intellectual property related to certain petroleum extraction technology (also known as hydrocarbon extraction technology) suitable to extract petroleum (or hydrocarbons) from tar sands and other sand-based ore bodies, and all related concepts and conceptualizations thereof (the “Extraction Technology”) was contributed to VivaVentures Energy Group, Inc., a 99% majority-owned subsidiary of Vivakor, and was assessed a fair market value of $16,385,157, which consists of the consideration of $11,800,000 and the Company assuming a deferred tax liability in the amount of $4,585,157. All ownership in the Extraction Technology (including all future enhancements, improvements, modifications, supplements, or additions to the Extraction Technology) was assigned to the Company and is currently being applied to the Company Remediation Processing Centers, which are the units that remediate material. The Extraction Technology is amortized over a 20-year life. For the years ended December 31, 2021 and 2020 the amortization expense of the technology was $819,258. Amortization expense for the years 2022 through 2026 is $819,258 in each respective year. As of December 31, 2021 and 2020 the net value of the Extraction Technology is $10,718,623 and $11,537,881.

 

In 2019, the Company began the process of patenting the Extraction Technology and all of its developments and additions since the acquisition, and we have filed a series of patents and capitalized the costs of these patents. As of December 31, 2021 and 2020, the capitalized costs of these patents are $113,430 and $100,064. The patents were placed in service in 2021 and are amortized over the patents’ useful life of twenty years. For the year ended December 31, 2021 the amortization expense of the patents was $5,560. Amortization expense for the years 2022 through 2026 is $5,672 in each respective year. As of December 31, 2021 the net value of the patents is $107,870.

 

The Company entered into an asset purchase agreement dated September 5, 2017, where two patents (US patent number 7282167- Method and apparatus for forming nano-particles and US patent number 9272920- System and method for ammonia synthesis) were purchased and attributed a fair market value of $4,931,380, which consists of the consideration of $3,887,982 and the Company assuming a deferred tax liability in the amount of $1,043,398. The patents grant the Company ownership of a nano catalyst technology that facilitates chemical manufacturing, with a focus on the production of ammonia, specifically for the gas phase condensation process used to create the iron catalyst. The nano catalyst accelerators make the Haber-Bosch process more efficient by increasing the active surface area of standard commercial iron catalysts, thereby lowering the reaction temperature and pressure required for the Haber-Bosch process to occur. As a result, less energy is needed to complete the reaction and create ammonia. The patents are amortized over their useful life of 10 years. For the years ended December 31, 2021 and 2020 the amortization expense of the patents was $369,854. Amortization expense for the years 2022 through 2026 is $493,138 in each respective year. As of December 31, 2021 and 2020 the net value of the patents was $2,835,544 and $3,328,682.

  

The following table sets forth the components of the Company’s intellectual property at December 31, 2021 2020:

 

                              
   December 31, 2021   December 31, 2020 
   Gross Carrying Amount   Accumulated Amortization   Net Book Value   Gross Carrying Amount   Accumulated Amortization   Net Book Value 
                         
Extraction Technology patents  $113,430   $5,560   $107,870   $100,064   $–   $100,064 
Extraction Technology   16,385,157    5,666,534    10,718,623    16,385,157    4,847,276    11,537,881 
Ammonia synthesis patents   4,931,380    2,095,836    2,835,544    4,931,380    1,602,698    3,328,682 
Total Intellectual property  $21,429,967   $7,767,930   $13,662,037   $21,416,601   $6,449,974   $14,966,627