Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets

v3.21.2
Intangible Assets
9 Months Ended
Sep. 30, 2021
Oil and Gas Properties  
Note 6. Intangible Assets

Note 6. Intangible Assets

 

The Company’s intangible asset consists of costs associated with securing in August 2021 an Exclusive Intellectual Property License Agreement with ESG Clean Energy, LLC (“ESG”), pursuant to which the Company received (i) an exclusive license to ESG’s patent rights and know-how related to stationary electric power generation (not in connection with vehicles), including methods to utilize heat and capture carbon dioxide in Canada, and (ii) a non-exclusive license to the intellectual property in up to 25 sites in the United States that are operated by the Company or its affiliates.

In consideration of the licenses, the Company paid an up-front royalty of $1,500,000 and the Company is obligated to make additional royalty payments as follows: (i) an additional $1,500,000 on or before January 31, 2022, which may be paid in whole or in part in the form of Viking’s common stock based on the price of Viking’s common stock on August 18, 2021, at ESG’s election; (ii) an additional $2,000,000 on or before April 20, 2022, which may be paid in whole or in part in the form of Viking’s common stock based on the price of Viking’s common stock on August 18, 2021, at ESG’s election; and (iii) continuing royalties of not more than 15% of the net revenues of Viking generated using the intellectual property, with the continuing royalty percentage to be jointly determined by the parties collaboratively based on the parties’ development of realistic cashflow models resulting from initial projects utilizing the intellectual property, and with the parties utilizing mediation if they cannot jointly agree to the continuing royalty percentage.

 

Viking’s exclusivity with respect to Canada shall terminate if minimum continuing royalty payments to ESG are not at least equal to the following minimum payments based on the date that ESG first begins capturing carbon dioxide and selling for commercial purposes one or more commodities from a system installed and operated by ESG using the Intellectual Property (the “Trigger Date”):

 

Years from the Trigger Date:

 

Minimum Payments for that Year

 

Year two

 

$ 500,000

 

Year three

 

$ 750,000

 

Year four

 

$ 1,250,000

 

Year five

 

$ 1,750,000

 

Year six

 

$ 2,250,000

 

Year seven

 

$ 2,750,000

 

Year eight

 

$ 3,250,000

 

Year nine and after

 

$ 3,250,000

 

 

If the continuing royalty percentage is adjusted jointly by the parties downward from the maximum of 15%, then the minimum continuing royalty payments for any given year from the Trigger Date shall also be adjusted downward proportionally.

 

The Company’s intangible assets consisted of the following at September 30, 2021 and December 31, 2020:

 

 

 

September 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

 

 

ESG Clean Energy License

 

$ 5,000,000

 

 

$ -

 

Accumulated amortization

 

 

(36,367 )

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

$ 4,963,633

 

 

$ -

 

 

The Company recognized amortization expense of $36,367 for the three and nine months ended September 30. 2021.

 

The estimated future amortization expense for each of the next five years is $304,465 per year.