Annual report pursuant to Section 13 and 15(d)

Intellectual Property

Intellectual Property
12 Months Ended
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
Intellectual Property

5.        Intellectual Property


On July 3, 2014, five of the founding stockholders contributed the rights to certain intellectual property to the Company in exchange for the issuance of 4,101,822 shares with a fair value of $1,059,000. This contribution was recorded as an intangible asset with an offset to additional paid

in capital for $637,158 and deferred taxes for $421,842. The fair market value of the intellectual property was determined by management with the assistance of an independent valuation specialist using an equal weighting of the incremental cash flow and relief from royalty methodologies.


Both methodologies used a discount rate of 50%. The discounted cash flow approach used a 10 year forecast and a 20% probability of achieving commercial success. The forecast assumed 85% of revenue is generated from sales of lead processed in Company owned and operated recycling plants and 15% of revenue is generated from license fees. The relief from royalty method used revenues equal to 50% of management’s discounted cash flow forecast and a license rate of 1.5% of revenue.


The increase of $146,400 in 2015 is due to fees associated with additional patent and trademark filings.


Intellectual property, net, is comprised of the following as of December 31:


    2015     2014  
Intellectual property   $ 1,219,080     $ 1,072,680  
Accumulated amortization     (153,967 )     (44,126 )
Intellectual property, net   $ 1,065,113     $ 1,028,554  


Aggregate amortization expense for the year ended December 31, 2015 and the period from inception (June 20, 2014) through December 31, 2014 was $109,841 and $44,125 respectively.


Estimated future amortization expense is as follows as of December 31, 2015;


2016   $ 121,898  
2017     121,898  
2018     121,898  
2019     121,898  
2020     121,898  
Thereafter     455,623  
Total   $ 1,065,113