Intangible assets

12 Months Ended

Dec. 31, 2020

Intangible assets

Intangible assets

9. Intangible assets

In February 2016, the Company purchased a 51% ownership interest in Aerex Industries, Inc. The purchase transaction identified certain intangible assets with a fair value of $5,900,000 and useful lives as follows: non-compete (5 years), trade name (15 years), certifications/programs (3 years), customer backlog (1 year), and customer relationships (4 years). In January 2020, the Company acquired the remaining 49% ownership interest in Aerex.

In October 2019, the Company purchased a 51% ownership interest in PERC Water Corporation. The purchase transaction identified certain intangible assets with a fair value of $3,990,000 and useful lives as follows: non-compete (3 years), trade name (15 years), customer backlog (2 years), and facility management contracts (6 years). In August 2020, the Company purchased an additional 10% of the ownership of PERC, increasing its ownership of this subsidiary to 61%.

The costs and accumulated amortization for these assets were as follows:

	December 31,
	2020		2019
Cost
Non-compete agreements	$	530,000	$	530,000
Trade names		2,700,000		2,700,000
Certifications/programs		2,000,000		2,000,000
Customer backlogs		460,000		460,000
Customer relationships		2,000,000		2,000,000
Facility management contracts		2,200,000		2,200,000
		9,890,000		9,890,000
Accumulated amortization
Non-compete agreements		(443,889)		(320,556)
Trade names		(560,000)		(380,000)
Certifications/programs		(2,000,000)		(2,000,000)
Customer backlogs		(310,000)		(130,000)
Customer relationships		(2,000,000)		(1,958,333)
Facility management contracts		(427,778)		(61,111)
		(5,741,667)		(4,850,000)
Intangible assets, net	$	4,148,333	$	5,040,000

Amortization of intangible assets for each of the next five years and thereafter is expected to be as follows:

2021	$	746,667
2022		582,778
2023		546,667
2024		546,667
2025		485,556
Thereafter		1,239,998
	$	4,148,333

Amortization expense was $891,667 and $841,667 for the years ended years ended December 31, 2020 and 2019, respectively.