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INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 6 – INTANGIBLE ASSETS

Intangible assets consist of proprietary developed software, intellectual property, customer lists and acquired contracts carried at cost less accumulated amortization and customer lists acquired at fair value less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives.

On January 1, 2022, the Company entered into an asset purchase agreement with to acquire certain assets of DTS. The purchase price for the Acquired Assets was $1,335,000, $500,000 of which was paid in cash and $835,000 of which was paid through the issuance of a four-year $835,000 promissory note dated January 1, 2022, paying interest at the rate of 3.25% per annum (see Note 11).

On January 19, 2022, SWK acquired the customer list of pursuant to an Asset Purchase Agreement for the customer list for $150,000 cash and the issuance of a promissory note in the aggregate principal amount of $75,000 (the “NEO3 Note”). The NEO3 Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $2,148. The purchase price has been recorded as an intangible asset with an estimated life of seven years.

On November 13, 2023, the Company entered into an asset purchase agreement with to acquire certain assets of JCS for cash of $278,489, prepaid time from clients in the amount of $21,511 and the issuance of a promissory note in the amount of $1,025,000 (the JCS Note”) for a total of $1,325,000. The JCS Note is due in 36 months from the closing date and bears interest at a rate of two percent (4.25%) per annum (see Note 7). The purchase price has been allocated to customer list with an estimated life of seven years. Upon completion of an independent valuation, the allocation of the purchase price to customer lists will be modified with the excess purchase consideration being allocated to goodwill (see Note 11).

The components of intangible assets are as follows:

	December 31, 2023			December 31, 2022			Estimated Useful Lives
Proprietary developed software	$	390,082		$	390,082		5 – 7
Intellectual property, customer list, and acquired contracts		9,068,283			7,743,283		5 – 15
Total intangible assets	$	9,458,365		$	8,133,365
Less: accumulated amortization		(4,539,516	)		(3,868,012	)
	$	4,918,849		$	4,265,353

Amortization expense related to the above intangible assets was $671,504 and $732,552, respectively, the years ended December 31, 2023 and 2022. There was no impairment of intangible assets for the years ended December 31, 2023 and 2022, respectively.

The Company expects future amortization expense to be the following:

	Amortization
2024	$	837,129
2025		833,653
2026		822,451
2027		808,802
2028		664,350
thereafter		952,464
Total	$	4,918,849

The following table provides a summary of the changes in goodwill for the years ended December 31, 2023 and 2022:

	December 31, 2023		December 31, 2022
Goodwill, at beginning of year	$	1,139,952	$	1,011,952
Goodwill additions		-		128,000
Goodwill deductions		-		-
Goodwill, at end of year	$	1,139,952	$	1,139,952