On April 24, 2017, the Company closed on the acquisition from the Energy and Environmental Research Center Foundation, a non-profit entity (“EERCF”), of all patent rights, including all patents and patents pending, domestic and foreign, relating to the technology which has formed the basis of the Company’s mercury control systems. Prior thereto, such technology had been licensed from EERCF pursuant to a license agreement, as amended, originally entered into in January 2009 (the “License Agreement”). A total of 42 domestic and foreign patents and patent applications were included in the acquisition. In accordance with the terms of the License Agreement, the patent rights were acquired for the purchase price of (i) $2,500,000 in cash, and (ii) 925,000 shares of common stock of which 628,998 shares were issued to EERCF and 296,002 were issued to the inventors who had been designated by EERCF. As a result of the acquisition of the patent rights, no additional monthly license maintenance fees and annual running royalties as provided in the License Agreement shall be due and owing to the EERCF following closing which fees and royalties have now been eliminated.

The Company was required to pay EERCF 35% of all sublicense income received by the Company, excluding royalties on sales by sublicensees. Sublicense income is payable by the Company within 30 day after the end of each calendar year to the licensor. On April 24, 2017, this requirement ended upon the Company’s payment for the assignment and acquisition of the patent rights. There was no sublicense income for the nine month period ended September 30, 2018 or the year ended December 31, 2017, respectively.

License and patent costs capitalized as of September 30, 2018 and December 31, 2017 are as follows:

The Company is currently amortizing its patents over their estimated useful life of 15 years. Amortization expense for the nine months ended September 30, 2018 and 2017 was $150,900 and $83,833, respectively. Amortization expense for the quarters ended September 30, 2018 and 2017 was $50,300 and $49,310, respectively. Estimated annual amortization for each of the next five years is approximately $200,000.