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GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended
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Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets Disclosure [Text Block] | NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS
| December 31, 2020 |  | Acquisitions |  | September 30, 2021
Goodwill | $ | 73,958 |  |  | $ | 12,156 |  |  | $ | 86,114 |
We believe significant synergies are expected to arise from these strategic acquisitions and their assembled workforces. This factor contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, we recorded goodwill for each acquisition. A portion of acquired goodwill will be amortizable for tax purposes. As of September 30, 2021, there has been no impairment of goodwill based on the qualitative assessments performed by the Company.
Gross Intangible Assets | December 31, 2020 |  | Acquisitions |  | September 30, 2021
Customer relationships | $ | 88,310 |  |  | $ | 26,401 |  |  | $ | 114,711 |
Developed technology | 12,001 |  |  | — |  |  | 12,001
Reseller relationships | 853 |  |  | 159 |  |  | 1,012
Trade names | 880 |  |  | — |  |  | 880
Non-compete agreements | 1,032 |  |  | — |  |  | 1,032
| $ | 103,076 |  |  | $ | 26,560 |  |  | $ | 129,636 |
In July 2020, we acquired certain assets of a payroll tax business (the “Asset Purchase Agreement”). The initial purchase price for the assets was $4,250, which we paid in cash at closing. The Asset Purchase Agreement set forth two subsequent purchase consideration payments, which are contingent on certain thresholds. The first contingent purchase consideration of $1,975, was offset by certain net amounts owed to us by the seller related to transition services in the amount of $191, was paid in June 2021 (a total payment of $1,784). The second and final contingent purchase consideration, will be based on the trailing twelve-month revenue at October 31, 2021, and will generally be made by April 30, 2022. We utilized a Monte Carlo simulation to determine the fair value of the contingent consideration. The adjustment to the fair value of the contingent consideration as of September 30, 2021 was the aforementioned $191 offset. In September 2021, the Company acquired certain assets (the “Second Asset Purchase Agreement”) of a payroll business, which was used to provide payroll processing services. The aggregate purchase price that the Company paid for these assets was $14,750, paid as follows: (i) $10,325 in cash at closing, (ii) the delivery of a promissory note in the amount of $2,213, and (iii) the delivery of 244 shares of the Company’s common stock, which the parties agreed had an aggregate value of $2,213 as of September 30, 2021. The Second Asset Purchase Agreement is subject to working capital adjustments to the purchase price. Also in September 2021, we acquired certain assets of a payroll business (the “Third Asset Purchase Agreement”). The initial purchase price for the assets was $24,150, of which $15,000 was paid in cash at closing. The Third Asset Purchase Agreement also included the delivery of 523 shares of the Company’s common stock, which both parties agreed had an aggregate value of $4,800 at closing. Finally, the Third Asset Purchase Agreement set forth a promissory note initially valued at $4,350 and includes a contingent consideration, which is contingent on certain thresholds and will be based on the trailing twelve-month revenue at September 30, 2022, which we expect will be paid in the fourth quarter of 2022. The promissory note has since been adjusted to $4,318 to account for a shortfall in working capital. We utilized a Monte Carlo simulation to determine the fair value of the contingent consideration. There was no adjustment to the fair value of the contingent consideration at September 30, 2021. The Second Asset Purchase Agreement and Third Asset Purchase Agreement mentioned above were of small, privately held companies, whose historic cash basis financial statements were unaudited and not prepared under generally accepted accounting principals in the United States, including, but not limited to, differences in revenue recognition. The disclosure of supplemental pro forma financial information suggested under ASC 805 for a public business entity has been deemed impracticable by management due to these reasons. The gross carrying amount and accumulated amortization of our intangible assets as of September 30, 2021 and December 31, 2020 are as follows (in thousands, except weighted average periods):
|  | Weighted Average Amortization Period (in Years) |  | Gross |  | Accumulated Amortization |  | Net
September 30, 2021 |  |  |  |  |  |  |  |
Customer relationships |  | 8.7 |  | $ | 114,711 |  |  | $ | (36,257) |  |  | $ | 78,454 |
Developed technology |  | 6.6 |  | 12,001 |  |  | (8,744) |  |  | 3,257 |
Reseller relationships |  | 7.2 |  | 1,012 |  |  | (859) |  |  | 153 |
Trade names |  | 3.0 |  | 880 |  |  | (513) |  |  | 367 |
Non-compete agreements |  | 5.2 |  | 1,032 |  |  | (878) |  |  | 154 |
|  | 8.4 |  | $ | 129,636 |  |  | $ | (47,251) |  |  | $ | 82,385 |
December 31, 2020 |  |  |  |  |  |  |  |
Customer relationships |  | 8.9 |  | $ | 88,310 |  |  | $ | (28,898) |  |  | $ | 59,412 |
Developed technology |  | 6.6 |  | 12,001 |  |  | (7,608) |  |  | 4,393 |
Reseller relationships |  | 7.0 |  | 853 |  |  | (853) |  |  | — |
Trade names |  | 3.0 |  | 880 |  |  | (312) |  |  | 568 |
Non-compete agreements |  | 5.2 |  | 1,032 |  |  | (853) |  |  | 179 |
|  | 8.5 |  | $ | 103,076 |  |  | $ | (38,524) |  |  | $ | 64,552 |
We record amortization expenses using the straight-line method over the estimated useful lives of the intangible assets, as noted above. Amortization expenses recorded in Operating Expenses were $2,534 and $2,424 for the three months ended September 30, 2021 and 2020, respectively. Amortization expenses recorded in Cost of Sales were $379 and $397 for the three months ended September 30, 2021 and 2020, respectively. Amortization expenses recorded in Operating Expenses were $7,590 and $7,122 for the nine months ended September 30, 2021 and 2020, respectively. Amortization expenses recorded in Cost of Sales were $1,135 and $1,225 for the nine months ended September 30, 2021 and 2020, respectively. There was no impairment of intangibles during the nine months ended September 30, 2021 based on the qualitative assessment performed by the Company. The following table summarizes the future estimated amortization expense relating to our intangible assets as of September 30, 2021 (in thousands):
2021 (three months) | $ | 3,712 |
2022 | 14,388 |
2023 | 13,262 |
2024 | 13,002 |
2025 | 12,216 |
2026 | 9,105 |
Thereafter | 16,700 |
| $ | 82,385 |

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