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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS

Effective January 1, 2020 the Company reorganized its reporting structure into a single operating unit. All of the acquisitions made by the Company are in one industry insurance agencies. These agencies operate in a very similar economic and regulatory environment. The Company has one executive who is responsible for the operations of the insurance agencies. This executive reports directly to the Chief Financial Officer (“CFO”) on a quarterly basis. Additionally, the CFO who is responsible for the strategic direction of the Company reviews the operations of the collective insurance agency business as opposed to an office-by-office view. In accordance with guidance in ASC 350-20-35-45, all the Company’s goodwill will be reassigned to a single reporting unit.

For the year ended December 31, 2021 the Company assessed goodwill in accordance with ASC 350-20-35-3, analyzing the relevant qualitative factors. The Company noted that it was not more likely than not that the fair value of the reporting unit is less than its carrying amount, thus determining that the two-step goodwill impairment test was not required. Pursuant to the qualitative assessment, the Company concluded that goodwill was not impaired and this conclusion remains reasonable as of March 31, 2022.

The following table rolls forward the Company’s goodwill balance for the periods ending March 31, 2022 and December 31, 2021. As discussed in Note 2 - Prior Period Adjustments, a $(503,345) adjustment was identified for goodwill which impacted the closing December 31, 2020 balance in the same amount. Accordingly, the December 31, 2020 balance is adjusted in the following table from the originally reported balance of $9,265,070 to $8,761,725.

SCHEDULE OF IMPAIRMENT OF GOODWILL

	Goodwill
December 31, 2020	$	8,761,725
Goodwill recognized in connection with Kush acquisition on May 1, 2021	$	1,288,552
December 31, 2021	$	10,050,277
Goodwill recognized in connection with Medigap acquisition on January 10, 2022	$	19,199,008
March 31, 2022	$	29,249,285

The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of March 31, 2022:

	Weighted Average Remaining Amortization period (Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade name and trademarks		5.1	$	2,117,475	$	(701,666	)	$	1,415,809
Internally developed software		4.4		881,586		(67,682	)		813,904
Customer relationships		9.7		8,787,290		(1,239,562	)		7,547,728
Purchased software		0.3		562,327		(499,846	)		62,481
Video Production Assets		0.8		50,000		(9,863	)		40,137
Non-competition agreements		2.6		3,504,809		(1,653,617	)		1,851,192
Contracts Backlog		0.8		210,000		(46,028	)		163,972
			$	16,113,487	$	(4,218,264	)	$	11,895,223

The following table sets forth the major categories of the Company’s intangible assets and the weighted-average remaining amortization period as of December 31, 2021:

	Weighted Average Remaining Amortization period (Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade name and trademarks		3.5	$	1,777,475	$	(609,822	)	$	1,167,653
Internally developed software		4.7		595,351		(28,443	)		566,908
Customer relationships		7.7		4,237,290		(1,048,726	)		3,188,564
Purchased software		0.6		562,327		(452,985	)		109,342
Video Production Assets		1.0		20,000		-			20,000
Non-competition agreements		2.9		3,504,809		(1,478,376	)		2,026,433
			$	10,697,252	$	(3,618,352	)	$	7,078,900

Amortization expense, as adjusted for certain software reclassifications is, $599,911 and $283,569 for the three months ended March 31, 2022 and 2021, respectively.

The following table reflects expected amortization expense as of March 31, 2022, for each of the following five years and thereafter:

Years ending December 31,	Amortization Expense
2022 (remainder of year)	$	1,823,253
2023		2,064,243
2024		1,771,983
2025		1,325,184
2026		1,064,552
Thereafter		3,846,008
Total	$	11,895,223