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GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2021

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Goodwill is derived from our 2019 business combination as well as our five business combinations in the first three quarters of 2021 (See Note 14). The aggregate goodwill recognized from our five 2021 acquisitions is $6,731,852 while the remaining goodwill from the 2019 acquisition was $3,517,315 at December 31, 2020. The Company performed a goodwill impairment test as of September 30, 2021 using market data and discounted cash flow analysis. Based on that test, we have determined that the carrying value of goodwill related to the 2019 acquisition of Genesys was further impaired in the amount of $2,530,325 at September 30, 2021. Goodwill was determined not to be impaired further at December 31, 2021 based on year end tests.

The changes in the carrying amount of goodwill for the years ended December 31, 2021 and 2020 are as follows:

	December 31, 2021			December 31, 2020
Carrying value - January 1	$	3,517,315		$	3,517,315
Goodwill acquired during the year		6,731,852			-
		10,249,167			3,517,315
Impairment losses		(2,530,325	)		-
Carrying value - December 31	$	7,718,842		$	3,517,315

Intangible Assets

On March 31, 2019, the Company acquired Intangible assets totaling $1,910,072 from Genesys, including customer contracts and intellectual property which are being amortized over the three year useful life.

We entered into an executive employment agreement on July 1, 2020 (the “Employment Agreement”) with Chad MacRae as the Senior Vice President Recruiters on Demand. The Employment Agreement specifies that certain customer contracts, databases, and computer equipment were to be transferred to the Company in connection with the hiring of Mr. MacRae. Mr. MacRae’s compensation package includes a $50,000 signing bonus and an annual base salary of $125,000. We have attributed the $50,000 signing bonus to the cost of the contracts acquired and are amortizing that cost over the estimated six-month economic life of the contracts.

During 2021, we acquired certain intangible assets pursuant to our Scouted, Upsider, OneWire, Parrut, and Novo Group acquisitions described in Note 14. These intangible assets aggregate approximately $11.6 million and consist primarily of sales and client relationships, contracts, intellectual property, partnership and vendor agreements and certain other assets. We completed the accounting and preliminary valuations of the assets acquired and, accordingly, the estimated fair values of these intangible assets are provisional pending the final valuations which will not exceed one year in accordance with ASC 805.

Intangible assets are summarized as follows:

	December 31, 2021			December 31, 2020
Customer contracts	$	8,093,787		$	233,107
License		5,512,399			1,726,965
Domains		40,862			-
		13,647,048			1,960,072
Less accumulated amortization		(3,905,216	)		(1,164,208	)
Carrying value	$	9,741,832		$	795,864

Amortization expense of intangible assets was $2,741,008 and $686,691 for the years ended December 31, 2021 and 2020, respectively, related to the intangible assets acquired in business combinations. Future amortization of intangible assets is expected to be approximately as follows: 2022, $3,577,824; 2023 $3,418,651; 2024, $1,650,353; 2025, $776,867; 2026, $293,001; and thereafter, $25,136. The Company began amortizing intangible assets from the Scouted, Upsider and OneWire acquisitions in the second quarter of 2021 and the Parrut and Novo Group acquisitions in the third quarter of 2021.