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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2022

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. The aggregate goodwill recognized from our five 2021 acquisitions is $6,696,209 while the 2019 acquisition was $3,517,315. The Company performed a goodwill impairment test as of June 30, 2022 using market data and discounted cash flow analysis and determined goodwill was not impaired at June 30, 2022. The Company performed a goodwill impairment test in 2021 using market data and discounted cash flow analysis. Based on that test, we determined that the carrying value of goodwill related to the 2019 acquisition of Genesys was impaired in the amount of $2,530,325 during 2021.

The changes in the carrying amount of goodwill for the periods ended June 30, 2022 and December 31, 2021 are as follows:

	June 30, 2022			December 31, 2021
Carrying value - January 1	$	7,718,842		$	3,517,315
Goodwill acquired during the year		-			6,731,852
		7,718,842			10,249,167
Purchase price measurement period adjustments		(35,644	)		-
Impairment losses		-			(2,530,325	)
Carrying value - end of period	$	7,683,198		$	7,718,842

Intangible Assets

During 2021, we acquired certain intangible assets pursuant to our Scouted, Upsider, OneWire, Parrut, and Novo Group acquisitions described in Note 13. 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. Prior to 2021, we had acquired approximately $2.0 million in intangible assets.

Intangible assets are summarized as follows:

	June 30, 2022			December 31, 2021
Customer contracts	$	8,093,787		$	8,093,787
License		1,726,965			1,726,965
Software acquired		3,785,434			3,785,434
Internal use software		763,785			-
Domains		40,862			40,862
		14,410,833			13,647,048
Less accumulated amortization		(5,830,929	)		(3,905,216	)
Carrying value	$	8,579,904		$	9,741,832

Amortization expense of intangible assets was $917,239 and $675,095 for the three months ended June 30, 2022 and 2021, respectively, and was $1,925,712 and $834,268 for the six months ended June 30, 2022 and 2021, respectively, related to the intangible assets acquired in business combinations and the internal use software. Approximate future amortization of intangible assets is expected to be as follows: 2022 (remainder of year), $1,843,059; 2023, $3,673,246; 2024 $1,904,948; 2025, $840,516; 2026, $293,001; and thereafter, $25,134. 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.