Intangibles

12 Months Ended

Dec. 31, 2019

Intangible Assets, Net (Excluding Goodwill) [Abstract]

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. Intangible assets acquired in connection with a business combination are valued at fair value and amortized on a straight-line basis over the expected useful life which may range from three (3) to fifteen (15) years or more depending on the intangible asset characteristics.

The Company’s intangible assets also include internally developed software used in the sales and delivery of its information technology service offerings. The Company capitalizes certain internal costs related to software development to deliver its information technology services including but not limited to its Intelligent Telecommunications Management System (ITMS™), Public Key Infrastructure (PKI) and Optimiser Telecom Data Intelligence (TDI™) applications. Significant development costs are capitalized from the point of demonstrated technological feasibility until the point in time that the product is available for general release to customers. Once the product is available for general release, capitalized costs are amortized based on units sold, or on a straight-line basis generally over the expected functional life which may range from two (2) to five (5) years.

The following tables summarize purchased and internally developed intangible assets subject to amortization as of the periods presented below:

	DECEMBER 31, 2019
								Weighted
								Average
	Gross Carrying		Accumulated			Net Book		Amortization
	Amount		Amortization			Value		Period
Customer Relationships	$	1,980,000	$	(1,980,000	)	$	-		8.0
Channel Relationships		2,628,080		(992,830	)		1,635,250		5.0
Internally Developed Software		1,623,122		(988,340	)		634,782		3.0
Trade Name and Trademarks		290,472		(109,734	)		180,738		5.0
	$	6,521,674	$	(4,070,904	)	$	2,450,770

	DECEMBER 31, 2018
								Weighted
								Average
	Gross Carrying		Accumulated			Net Book		Amortization
	Amount		Amortization			Value		Period
Customer Relationships	$	1,980,000	$	(1,732,500	)	$	247,500		8.0
Channel Relationships		2,628,080		(817,625	)		1,810,455		5.0
Internally Developed Software		1,476,623		(630,927	)		845,696		3.0
Trade Name and Trademarks		290,472		(90,370	)		200,102		5.0
	$	6,375,175	$	(3,271,422	)	$	3,103,753

Purchased Intangibles

For the years ended December 31, 2019 and 2018, the Company did not recognize any acquisition related intangible assets.

For the years ended December 31, 2019, there were no disposals or sales of purchased intangible assets. For the year ended December 31, 2018, the Company disposed of fully amortized purchased intangible assets with a historical cost and accumulated amortization of approximately $2,374,700

Internally Developed

For the year ended December 31, 2019, the Company recorded capitalized software development costs of approximately $146,000 related to costs associated with our next generation TDI™ application.

For the year ended December 31, 2018 the Company recorded capitalized software development costs of approximately $229,000 related to costs associated with our next generation TDI™ application.

The total weighted average remaining life of purchased and internally developed intangible assets is approximately 5.3 years and 1.3 years, respectively, at December 31, 2019.

The following table summarizes the estimated future amortization by purchased intangible asset type for fiscal years ending December 31:

INTANGIBLE ASSET TYPE	2020		2021		2022		2023		2024		Thereafter		Total
Channel Relationships	$	175,205	$	175,205	$	175,205	$	175,205	$	175,205	$	759,225	$	1,635,250
Internally Developed Software		274,280		244,583		98,533		17,386		-		-		634,782
Trade Name and Trademarks		19,365		19,365		19,365		19,365		19,365		83,914		180,738
	$	468,850	$	439,153	$	293,102	$	211,956	$	194,570	$	843,139	$	2,450,770

The aggregate amortization expense recorded was approximately $786,000 and $756,000 for the years ended December 31, 2019 and 2018, respectively.