Intellectual Property and License Agreement

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Intellectual Property and License Agreement

Note 5 – Intellectual Property and License Agreement

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 $74,178 and $71,678 at March 31, 2019 and December 31, 2018, 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 each of the first six years, and $100,000, per commercial year, for the remainder of the agreement.

For the three months ended March 31, 2019 and 2018, amortization expense was $2,500 and $4,874 respectively, and accumulated amortization of the intangible assets was $28,322 and $25,822 at March 31, 2019 and December 31, 2018, respectively.

Future amortization of the intangible assets is as follows as of March 31, 2019:

Year ending December 31:
2019	$	7,500
2020		10,000
2021		10,000
Thereafter		44,178
Total	$	71,678