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GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2024
GOODWILL AND OTHER INTANGIBLE ASSETS |
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 was $6,731,852 (less a $35,644 purchase price adjustment) while the remaining goodwill from the 2019 acquisition was $3,517,315 as of December 31, 2020. The Company performed a goodwill impairment test during 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 during 2021. The Company performed its goodwill impairment test during 2022, based on the net losses and net cash used in operations in 2022 and a decline in the valuation of the business, managements application of the formula to compute goodwill impairment resulted in an impairment charge in fiscal 2022 of $582,114. The Company performed an impairment test as of the last day of year ended December 31, 2024 following the determination by management that a triggering event had occurred. As a result of this impairment test, the Company concluded, based on the market approach valuation method, that the carrying amount of its online recruitment business exceeded our estimated fair value of our enterprise and the Company recorded a non-cash goodwill impairment charge of $4,695,743, which is included in our consolidated statements of operations for the year ended December 31, 2024. As a result of this impairment charge, the goodwill carrying value was reduced to $2,405,341 as of December 31, 2024. The goodwill impairment during the year ended December 31, 2024 was primarily driven by declines in the Company’s revenue from its online recruitment platform which caused a decline in value when calculating against the revenue multiple determined under the market approach. The Company performed its goodwill impairment tests during the year ended December 31, 2023, which resulted in no impairment. The changes in the carrying amount of goodwill for the years ended December 31, 2024, and 2023 are as follows:
|  | December 31, 2024 |  |  | December 31, 2023 |
Carrying value - January 1 |  | $ | 7,101,084 |  |  | $ | 7,101,084 |
|  |  | 7,101,084 |  |  |  | 7,101,084 |
Impairment losses |  |  | (4,695,743 | ) |  |  | - |
Carrying value - end of year |  | $ | 2,405,341 |  |  | $ | 7,101,084 |
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. During 2021, we acquired certain intangible assets pursuant to our Scouted, Upsider, OneWire, Parrut, and Novo Group acquisitions. 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 valuations of the assets acquired. On February 23, 2024, the Company entered into a certain Technology License and Commercialization Agreement with GoLogiq, Inc. (the “GOLQ”) that supersedes and replaces in its entirety the GOLQ Agreement, as amended by the August 29, 2023 Amendment and the August 18, 2023 Amendment. Under the GOLQ Licensing Agreement, GOLQ grants the Company a worldwide, exclusive license to the Company to develop its fintech technology and sell products derived thereof, including its Createapp, Paylogiq, Gologiq, and Radix AI technology and products, for a term of 10 years, with automatic two-year renewals. On March 7, 2024, the Company appointed the CEO and Director of GOLQ to be the new Chief Executive Officer and President. On December 21, 2024 he resigned from his position as member of the Board of Directors of Nixxy, Inc. His resignation was not due to any disagreement with the Company (See Note 11). On March 28, 2024, the Company and GOLQ entered into an Amendment to Technology License and Commercialization Agreement to decrease the future royalty from eight percent to five percent for which the Company agreed to grant GOLQ a warrant to purchase 292,000 shares of Company common stock for a price equal to $0.01 per share. As a result of this transaction the company issued GOLQ 392,155 shares of Company’s common stock valued at $647,055, based on the quoted trading price on the grant date, and warrant to purchase 292,000 shares of Company’s common stock valued at $480,358 based on the Black-Scholes option pricing model. As of December 31, 2024, the total cost basis in the intangible assets purchased from GoLogiq is $1,127,413 with accumulated amortization of $327,785 and a net carrying value of $799,628. Intangible assets are summarized as follows:
|  | December 31, 2024 |  |  | December 31, 2023 |
Customer contracts |  | $ | 8,093,787 |  |  | $ | 8,093,787 |
Software acquired |  |  | 3,785,434 |  |  |  | 3,785,434 |
Licenses |  |  | 2,854,378 |  |  |  | 1,726,966 |
Internal use software developed |  |  | 325,491 |  |  |  | 325,491 |
Domains |  |  | 40,862 |  |  |  | 40,862 |
|  |  | 15,099,952 |  |  |  | 13,972,539 |
Less accumulated amortization |  |  | (9,860,162 | ) |  |  | (8,832,778 | )
Total |  |  | 5,239,790 |  |  |  | 5,139,762 |
Less accumulated impairment |  |  | (3,863,305 | ) |  |  | (3,838,425 | )
Carrying value |  | $ | 1,376,485 |  |  | $ | 1,301,337 |
Amortization expense of intangible assets was $1,027,384 and $1,277,355 for the years ended December 31, 2024, and 2023, respectively, related to the intangible assets acquired in business combinations. Future amortization of intangible assets is expected to be approximately as follows: 2025, $811,916; 2026, $521,876; 2027, $38,129; 2028, $550; and thereafter, $4,014. The company performed its impairment test during 2022 using the market and income approach, and determined that the Company’s customer contracts, software acquired, internal use software developed, and domains were impaired by $3,838,425. The Company performed its impairment test during 2023 which resulted in no additional impairment. In 2024 the Company performed its impairment test during 2024 and determined that the domains connected to Parrut were fully impaired due to no intention of using such domains going forward, and therefore recorded $24,881 of impairment expense.

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