INTANGIBLE ASSETS |
NOTE 4 - INTANGIBLE ASSETS
On June 15, 2021, pursuant to an asset purchase agreement dated June 4, 2021, the Company closed on the acquisition of a customer list (the “Customer List”) and other assets of Advisio Solutions, LLC (“Advisio”) for consideration consisting of: (i) $1,050,000 paid in cash and (ii) the issuance of an aggregate of 100,000 shares of the Company’s common stock with an aggregate issuance date fair value of $532,000. Under the screen test requirements under ASC 805, the Company concluded that the Customer List represented substantially all of the fair value of the gross assets acquired and, accordingly, determined the set was not considered a business, such that the Company applied asset acquisition accounting and recorded the acquisition of the Customer List as an intangible asset in the amount of $1,582,000 that will be amortized on a straight-line basis over its useful life of seven years.
Intangible assets consist of the following:
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|
December 31, |
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|
2021 |
|
2020 |
Acquired data |
|
$ |
1,300,336 |
|
$ |
1,300,336 |
Acquired software |
|
|
183,072 |
|
|
100,000 |
Acquired customer lists |
|
|
2,162,000 |
|
|
— |
Restrictive covenant agreements |
|
|
70,000 |
|
|
— |
|
|
|
3,715,408 |
|
|
1,400,336 |
Less: accumulated amortization |
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|
(768,798) |
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|
(328,486) |
Intangible assets, net |
|
$ |
2,946,610 |
|
$ |
1,071,850 |
Amortization of intangible assets consists of the following:
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|
|
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Acquired |
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Restrictive |
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|
|
|
|
|
|
|
Acquired |
|
Acquired |
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Customer |
|
Covenant |
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Accumulated |
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|
|
|
Data |
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Software |
|
Lists |
|
Agreements |
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Amortization |
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Total |
Balance as of January 1, 2020 |
|
$ |
— |
|
$ |
100,000 |
|
$ |
— |
|
$ |
— |
|
$ |
(16,667) |
|
$ |
83,333 |
Additions |
|
|
1,300,336 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,300,336 |
Amortization expense |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(311,819) |
|
|
(311,819) |
Balance as of December 31, 2020 |
|
|
1,300,336 |
|
|
100,000 |
|
|
— |
|
|
— |
|
|
(328,486) |
|
|
1,071,850 |
Additions |
|
|
— |
|
|
83,072 |
|
|
2,162,000 |
|
|
70,000 |
|
|
— |
|
|
2,315,072 |
Amortization expense |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(440,312) |
|
|
(440,312) |
Balance as of December 31, 2021 |
|
$ |
1,300,336 |
|
$ |
183,072 |
|
$ |
2,162,000 |
|
$ |
70,000 |
|
$ |
(768,798) |
|
$ |
2,946,610 |
Weighted average remaining amortization period at December 31, 2021 (in years) |
|
|
3.0 |
|
|
1.0 |
|
|
5.5 |
|
|
4.9 |
|
|
4.4 |
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Acquired |
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Restrictive |
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|
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|
|
Acquired |
|
Acquired |
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Customer |
|
Covenant |
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Accumulated |
|
|
Data |
|
Software |
|
Lists |
|
Agreements |
|
Amortization |
Balance as of January 1, 2020 |
|
$ |
— |
|
$ |
16,667 |
|
$ |
— |
|
$ |
— |
|
$ |
16,667 |
Amortization expense |
|
|
261,819 |
|
|
50,000 |
|
|
— |
|
|
— |
|
|
311,819 |
Balance as of December 31, 2020 |
|
|
261,819 |
|
|
66,667 |
|
|
— |
|
|
— |
|
|
328,486 |
Amortization expense |
|
|
252,081 |
|
|
48,538 |
|
|
138,528 |
|
|
1,165 |
|
|
440,312 |
Balance as of December 31, 2021 |
|
$ |
513,900 |
|
$ |
115,205 |
|
$ |
138,528 |
|
$ |
1,165 |
|
$ |
768,798 |
The estimated future amortization expense is as follows:
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|
|
For the Years Ending December 31, |
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Total |
2022 |
|
$ |
718,601 |
2023 |
|
|
706,206 |
2024 |
|
|
683,192 |
2025 |
|
|
270,194 |
2026 and beyond |
|
|
568,417 |
|
|
$ |
2,946,610 |
|