Intangible Assets

The Company’s intangible assets are comprised of purchased intangibles consisting of customer relationships, channel relationships, telecommunications software, trade names and trademarks and non-compete agreements. The Company’s intangible assets also include internally developed software used in the sales and delivery of its information technology service offerings. The following table summarizes purchased and internally developed intangible assets subject to amortization as follows:

	DECEMBER 31, 2016
							Weighted
							Average
	Gross Carrying		Accumulated		Net Book		Amortization
	Amount		Amortization		Value		Period

Customer Relationships	$	1,980,000	$	(1,237,500)	$	742,500	4.5
Channel Relationships		2,628,080		(467,215)		2,160,865	12.5
Telecommunications Software		2,796,756		(1,811,984)		984,772	1.7
Cybersecurity Authority to Operate		444,665		(272,732)		171,933	3.0
Trade Name and Trademarks		290,472		(51,640)		238,832	8.0

	$	8,139,973	$	(3,841,071)	$	4,298,902

	DECEMBER 31, 2015
							Weighted
							Average
	Gross Carrying		Accumulated		Net Book		Amortization
	Amount		Amortization		Value		Period

Customer Relationships	$	1,980,000	$	(990,000)	$	990,000	5.5
Channel Relationships		3,168,080		(724,009)		2,444,071	13.5
Telecommunications Software		2,593,936		(1,409,268)		1,184,668	2.7
Cybersecurity Authority to Operate		325,138		(114,551)		210,587	3.0
Trade Name and Trademarks		360,472		(88,275)		272,197	9.0

	$	8,427,626	$	(3,326,103)	$	5,101,523

Purchased Intangibles

For the years ended December 31, 2016 and 2015, the Company did not recognize any acquisition related intangible assets.

For the year ended December 31, 2016 the Company disposed of fully amortized purchased intangible assets with a historical cost and accumulated amortization of approximately $610,000, respectively. For the year ended December 31, 2015 the Company disposed of fully amortized purchased intangible assets with a historical cost and accumulated amortization of approximately $2.5 million, respectively.

Internally Developed

For the years ended December 31, 2016 and 2015 the Company recorded capitalized software costs related to our Cybersecurity Authority to Operate certification totaling approximately $119,500 and $186,300, respectively. The Company initially capitalized approximately $441,000 of software development costs associated with its certificate-on-device solution set during the second and third quarter of 2016. During the fourth quarter of 2016, the Company wrote off all amounts capitalized due to loss of a key integrator for this solution. The Company did not capitalize any product development costs for the year ended December 31, 2015. For the years ended December 31, 2015 the Company did not dispose of any internally developed intangible assets.

The total weighted average remaining life of purchased and internally developed intangible assets is approximately 4.4 years and 2.1 years, respectively, at December 31, 2016.

The following table summarizes reflects estimated future amortization for purchased intangible assets for fiscal years ending December 31:

	2017		2018		2019		2020		2021		Thereafter		Total

Customer Relationships	$	247,500	$	247,500	$	247,500	$	-	$	-			$	742,500
Channel Relationships		175,200		175,200		175,200		175,200		175,200		1,284,865		2,160,865
Telecommunications Software		462,800		230,100		133,700		73,600		73,600		10,972		984,772
Cybersecurity Software		135,700		36,233		-				-				171,933
Trade Name and Trademarks		19,400		19,400		19,400		19,400		19,400		141,832		238,832

	$	1,040,600	$	708,433	$	575,800	$	268,200	$	268,200	$	1,437,669	$	4,298,902

The aggregate amortization expense recorded was approximately $1,125,000 and $1,077,800 for the years ended December 31, 2016 and 2015, respectively.