Note 5 - Intangible Assets

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 5 INTANGIBLE ASSETS

The Company’s intangible assets at June 30, 2024 and December 31, 2023 include the following:

	*Estimated*
	*Economic Life*
Description	*(in years)*	*June 30, 2024*			*December 31, 2023*

Developed technologies	10	$	19,582,402		$	19,582,402
License agreements	10		510,752			510,752
Customer agreements	1		122,885			122,885
Distribution agreements	8		19,733			19,733
Trademarks	10		7,000			7,000
Accumulated amortization			(5,383,488	)		(4,376,740	)
Intangible assets, net		$	14,859,284		$	15,866,032

Accumulated amortization as of June 30, 2024 and December 31, 2023 consisted of the following:

	*June 30, 2024*		*December 31, 2023*
Developed technologies	$	5,093,237	$	4,113,045
License agreements		156,624		131,917
Customer agreements		122,885		122,885
Distribution agreements		8,992		7,493
Trademarks		1,750		1,400
Accumulated amortization	$	5,383,488	$	4,376,740

For the three-months ended June 30, 2024 and 2023, amortization expense related to intangible assets was $503,374 and $500,451, respectively. For the six-months ended June 30, 2024 and 2023, amortization expense related to intangible assets was $1,006,748 and $1,000,902, respectively.

Future minimum amortization expense is as follows at June 30, 2024:

Remainder of 2024	$	986,751
2025		1,993,499
2026		1,993,499
2027		1,993,499
2028		1,993,499
Thereafter		5,898,537
	$	14,859,284

Changes in the intangible assets balances for the six-months ended June 30, 2024 and 2023, are presented below:

	*As of December 31, 2023*			*Additions*		*Impairment*		*Amortization*			*As of June 30, 2024*
Intangible assets	$	20,242,772		$	—	$	—	$	—		$	20,242,772
Accumulated amortization		(4,376,740	)		—		—		(1,006,748	)		(5,383,488	)
Total intangible assets and goodwill	$	15,866,032		$	—	$	—	$	(1,006,748	)	$	14,859,284

	*As of December 31, 2022*			*Additions*		*Impairment*		*Amortization*			*As of June 30, 2023*
Intangible assets	$	20,042,772		$	—	$	—	$	—		$	20,042,772
Accumulated amortization		(2,379,091	)		—		—		(1,000,902	)		(3,379,993	)
Total intangible assets and goodwill	$	17,663,681		$	—	$	—	$	(1,000,902	)	$	16,662,779

The Company is party to three license agreements (collectively, the “AST License Agreements”) with American Science and Technology Corporation (“AST”), pursuant to which the Company agreed to license certain intellectual property of AST for use at three facilities in exchange for three facility-specific license fees of $500,000 each, and a royalty fee equal to 1.0% of the gross revenue of each of the first three licensed facilities. As of June 30, 2024, we have obtained the three license agreements and no additional license payments are anticipated. As of June 30, 2024, no royalty fees have been paid under the AST License Agreements.

On December 28, 2023, the Company entered into an amendment (the “2023 FPC Asset Purchase Agreement Amendment”) with Flux Photon Corporation (“FPC”) to amend that certain Asset Purchase Agreement, dated on September 7, 2021, and amended on December 10, 2021 (as amended, the “FPC Asset Purchase Agreement”). Pursuant to the FPC Asset Purchase Agreement, the Company acquired certain intellectual property and related photocatalysis laboratory equipment (the “FPC Assets”). The original purchase price included a payable for the FPC Assets of $17,650,000, payable only from 20% of future cash flows defined as the future monthly consolidated sales, less total variable costs, less operating expenses, maintenance, tax payments, and debt service payments of the Company and its now and hereafter-existing subsidiaries until the purchase prices has been fully paid. The 2023 FPC Asset Purchase Agreement Amendment reduced the purchase price payable to FPC to $16,850,000. On December 28, 2023, the Company paid $200,000 on this payable which was accounted for as an acquisition of intellectual property. The remaining balance of $16,650,000 will be paid to FPC from future cash flows. The Company’s chief technology officer and a member of the Company's board of directors, is also the owner of 100% of the outstanding common stock of FPC and as such was the indirect beneficiary of all payments made to FPC pursuant to the FPC Asset Purchase Agreement (see Note 14, Related Party Transactions).