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Software, Net
 12 Months Ended
Dec. 31, 2024
Software, Net [Abstract]  
Software, Net

10. Software, Net

 

Software consisted of the following as of the periods indicated:

 

   As of December 31, 
   2024   2023 
 Software  $1,774,000   $1,081,000 
 Retail Platform   4,093,000    635,000 
Total Software   5,867,000    1,716,000 
  Less accumulated amortization – Software   (1,031,000)   (284,000)
  Less impairment – Technology Platform   
—
    (990,000)
Total Software, net  $4,836,000   $442,000 

 

The Company capitalized $978,000 in software development costs for a technology platform integration as of December 31, 2023. In the fourth quarter of 2023, the Company reassessed the strategic direction of the technology platform and determined that an other than temporary impairment had occurred. The Company recognized an impairment loss of $990,000 for the year ended December 31, 2023, which is included in “Depreciation and amortization” in the consolidated statements of operations.

 

The Company contracted with a technology vendor in the fourth quarter of 2023 to support the development of the Retail Platform, supplementing its internal technology resources. The total software development expense related to the Retail Platform was $4,093,000 as of December 31, 2024, all of which was capitalized. Amortization for the Retail Platform will commence once it is placed in service, which is expected to be in the second quarter of 2025.

 

Total amortization of software was $485,000 and $442,000 for the years ended December 31, 2024 and 2023, respectively.

 

As of December 31, 2024, the Company estimates the following future amortization of software assets:

 

Year  Amount 
2025  $1,036,000 
2026   1,077,000 
2027   881,000 
2028   819,000 
2029 and after   1,023,000 
Total  $4,836,000 

 

Transaction with J2 Financial Technology

 

On January 18, 2024, STCH entered into a Purchase Agreement (the “Purchase Agreement”) with J2 Financial Technology, Inc., d/b/a “Guild”, a Delaware corporation (“J2 Financial”). The transaction was accounted for as an asset acquisition in accordance with Topic 805.

 

Under the Purchase Agreement, STCH purchased a mobile self-directed trading app for the total purchase price of $385,000. The purchase price consisted of $35,000 of cash and 200,000 restricted shares of the Company’s common stock (priced at the historical 30-day moving average as of January 18, 2024) worth approximately $350,000. This purchase is part of the software related to the Retail Platform and recorded in the line item “Software, net” in the statements of financial condition.