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Intangible Assets

9 Months Ended

Sep. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Note 2 – Intangible Assets

The Company accounts for intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, “Goodwill and Other Intangible Assets,” (“FASB ASC 350”), which requires that intangibles with indefinite useful lives be tested annually for impairment and those with finite useful lives be amortized over their useful lives.

In September 2019, the Company acquired the assets of Gateway Giving, LLC and recorded intangible assets of $5,300,000. The purchase price of the acquisition consisted of a cash payment of $3,000,000 and a potential earnout of $4,000,000. The Company estimated the earnout component to be $2,300,000. Those intangible assets were estimated as $3,325,000 for goodwill, $1,500,000 for software, $325,000 for the customer list, and $150,000 for non-compete agreements. The amounts recorded for the software, the customer list, the non-compete agreements, and goodwill were done so on a provisional basis and will be adjusted upon the completion of a valuation.

Details of the Company’s intangible assets are as follows:

September 30, 2019

December 31, 2018

(In thousands)

Gross Carrying

Amount

Accumulated

Amortization

Gross Carrying

Amount

Accumulated

Amortization

Assets eligible for amortization:

Customer lists

$

4,613

$

(3,352)

$

4,288

$

(3,071)

Patents

72

(19)

72

(16)

Non-compete agreements

482

(334)

332

(326)

Software

1,734

(276)

234

(234)

Other

500

(250)

500

(225)

Unamortized intangible assets:

Goodwill¹

16,121

(227)

12,796

(227)

Total intangible assets

$

23,522

$

(4,458)

$

18,222

$

(4,099)

¹

Amortization through December 31, 2001 prior to adoption of FASB ASC 350.

The customer lists are amortized over seven and ten years; the patents over 18 years; the non-compete agreements over two and five years; software over three years; and other intangible assets over 15 years. Amortization of intangible assets amounted to $359,000 and $331,000 for the nine-month periods ended September 30, 2019 and 2018, respectively. Estimated annual amortization of intangibles is as follows: $604,000 in 2019, $983,000 in each of 2020 and 2021, $498,000 in 2022 and $164,000 in 2023.