Note 6 - Intangible Assets

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE

6

– INTANGIBLE ASSETS

On

September 12, 2016,

the Company executed an agreement to acquire assets, including a patent related to LED Lighting, from Tesla Digital, Inc., a Canadian corporation, and Stevan (Steve) Pokrajac.

Material consideration given by Company was: (a) Shares of CEN common stock equal to

$5

million upon commencement of public trading (b) The transfer of real properties located at

135

North Rear Road, Lakeshore, Ontario, Canada having a fair value of

$2,161,467

and

1517

-

1525

Ridge Road having a purchase cost (including other related disbursements) to the Company of

$202,666.

 

The patent intangible remains in escrow in the name of Tesla Digital, Inc. until full settlement of the terms of the agreement. In the interim, CEN has the rights to use the patented technology.

In addition, the Company will employ Stevan Pokrajac in connection with the development of the acquired technology with compensation equal to

$200,000

per year, commencing with the start of operations.

In

March 2018,

the Tesla agreement was amended to replace the

$5

million stock consideration commitment with a commitment to issue

one million

registered shares of CEN common stock with a closing date of

September 30, 2018.

On

October 4, 2018,

this agreement was amended to extend the closing date to

December 15, 2018.

The modification of the agreement converted a fixed value of shares to a fixed number of shares. Due to the nature of this being all in equity, the liability was reduced and additional paid in capital was increased by

$4,380,000

to reflect the fair value of the shares committed at the date of the amendment. This liability will be remeasured at each reporting date using the current fair value of CEN’s common shares.

Management reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset

may

not

be recoverable based on the undiscounted cash flows of the asset. If the carrying amount of an asset

may

not

be recoverable, a write-down to fair value is recorded. Fair values are determined based on the discounted cash flows, or external appraisals, as applicable.

The intangible assets consist of the following:

	September 30, 2018			December 31, 2017
Lighting patent	$	6,797,000		$	6,797,000
Accumulated amortization		(885,026	)		(566,417	)
Net	$	5,911,974		$	6,230,583

The lighting patent is being amortized straight-line over approximately

16

years. Expected amortization expense is

$424,812

per year through

2031,

with the remaining

$283,216

to be amortized in

2032.