Intellectual Property and Note Payable

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Intellectual Property and Note Payable

Note 5 – Intellectual Property and Note Payable

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 December 31, 2016 and 2015.

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 in November 2015.Accumulated amortization with respect to this intellectual property was $18,276 and $6,092 at December 31, 2016 and 2015, respectively.

On June 1, 2016, the Company entered into a ten-year License Agreement with Helidyne LLC for total consideration of $100,000 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.

For the years ended December 31, 2016 and 2015, amortization expense was $18,006 and $61,045 respectively, and accumulated amortization of the intangible assets was $683,538 and $665,532 at December 31, 2016 and 2015, respectively.

Future amortization of the intangible assets was as follows as of December 31, 2016:

Year ending December 31:
2017	$	22,184
2018		12,374
2019		10,000
2020		10,000
Thereafter		54,178
Total	$	108,736

Note Payable at December 31, 2015 consists of $47,569 promissory note to VyrexIP Holdings Inc. for the purchase of intellectual property. The Company has agreed to pay principal plus accrued interest over 10 monthly payments of $6,080.64, each due on the 15th day of each month, beginning October 15th, 2015. This note was paid in full in April 2016.