NOTE 6—INTANGIBLES, NET

On January 1, 2026, OmniMetrix entered into a Technology Partnership Agreement (the “AIO Agreement”) with AIO Systems Ltd., an Israeli technology company (“AIO”). Under the AIO Agreement, OmniMetrix obtained the exclusive right to market, distribute, integrate, and sell AIO’s centralized monitoring and management related products and services. The Company evaluated the payment and concluded that the payment represents consideration for the acquisition of identifiable intangible rights and deliverables, principally consisting of (i) the exclusive distribution rights granted in the Territory, as defined in the AIO Agreement, and (ii) the contractually-required market-readiness deliverables.

The AIO Agreement has been classified as a finite-lived intangible asset and is being amortized on a straight-line basis over its estimated useful life of five (5) years, which corresponds to the minimum contractual performance period of the AIO Agreement. Amortization commenced when the asset became available for its intended use, which the Company determined to have occurred on April 1, 2026, the date AIO completed installation of the operational demonstration unit. This is the date on which OmniMetrix became able to commence its commercialization activities under the AIO Agreement. Amortization expense during the nine- and three-month periods ended September 30, 2026 was $25,000 and $12,000, respectively.

In connection with the Gen-Tracker Acquisition on September 9, 2026, the Company acquired finite-lived intangible assets with an aggregate preliminary fair value of $1,847,000, consisting of customer relationships of $1,730,000, a trade name of $67,000 and a non-compete agreement of $50,000. These assets are being amortized on a straight-line basis over estimated useful lives of eight years, ten years and five years, respectively, resulting in a weighted-average amortization period of approximately eight years. Amortization expense related to these assets was $13,000 for each of the nine- and three-month periods ended September 30, 2026. The amounts assigned to these assets are provisional and subject to adjustment during the measurement period upon completion of the purchase price allocation. See Note 14.

Patents are amortized over the patent term, which on average is twenty years.

 SCHEDULE OF INTANGIBLES, NET 

Estimated future amortization expense as of September 30, 2026 is as follows (in thousands):

  SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSES