Note 5 - Intangible Assets

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE

5

– INTANGIBLE ASSETS

On

September 12, 2016,

the Company executed an agreement dated

August 31, 2016,

to acquire assets, including a patent related to LED Lighting, from Tesla Digital, Inc., a Canadian Corporation, and Stevan (Steve) Pokrajac (the “Sellers”).

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 remains in the name of Tesla Digital, Inc. until full settlement of the terms of the agreement. In the interim, pursuant to an updated agreement executed on

April 15, 2019

between the Company and the Sellers, CEN has reaffirmed the rights to use the patented technology.

In addition, the Company agreed to employ Stevan Pokrajac, by an LED subsidiary that the Company plans to form, but which has

not

yet been formed, 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.

On

April 3, 2019,

the Company entered into an amendment which extended the closing date of the agreement to

December 31, 2019.

On

March 16, 2020

the Company entered into an amendment extending the closing date until

December 31,

2021.The

March 2018

modification of the agreement converted a fixed value of shares to a fixed number of shares. Accordingly, 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. As of both

June 30, 2020

and

December 31, 2019,

the fair value of this liability was

$720,000

.

This liability will be remeasured at each reporting date using the current fair value of CEN's common shares.

The Company intends to explore using the patented LED Lighting Technology across manufacturing operations and licensing opportunities across multiple industries such as horticultural, automotive, industrial and commercial lighting. The assets acquired, other than the patent, included certain machinery and raw materials, which were old and non-functioning and accordingly, had

no

fair value.

The intangible asset consists of the following:

	June 30, 2020			December 31, 2019
Lighting patent	$	6,797,000		$	6,797,000
Accumulated amortization		(1,628,447	)		(1,416,041	)
Net	$	5,168,553		$	5,380,959

As of

June 30, 2020

and

December 31, 2019,

there is

no

impairment expense recognized based on the Company's expectations that it will be able to monetize the patent. The lighting patent is being amortized straight-line over

16

years. Expected amortization expense is

$424,812

per year through

2031,

with the remaining

$283,215

to be amortized in

2032.