Intangibles Assets

12 Months Ended

Dec. 31, 2024

Intangibles Assets

Intangible Assets

9. 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, 2024
	Gross
	Carrying		Accumulated			Net Book
	Amount		Amortization			Value
Customer Relationships	$	2,392,000	$	(777,400	)	$	1,614,600
Channel Relationships		2,628,080		(1,868,857	)		759,223
Internally Developed Software		7,837,115		(6,045,723	)		1,791,392
Trade Name and Trademarks		1,330,472		(431,892	)		898,580
	$	14,187,667	$	(9,123,872	)	$	5,063,795

	DECEMBER 31, 2023
	Gross
	Carrying		Accumulated			Net Book
	Amount		Amortization			Value
Customer Relationships	$	2,392,000	$	(538,200	)	$	1,853,800
Channel Relationships		2,628,080		(1,693,652	)		934,428
Internally Developed Software		7,892,045		(4,331,203	)		3,560,842
Trade Name and Trademarks		1,330,472		(343,194	)		987,278
	$	14,242,597	$	(6,906,249	)	$	7,336,348

Purchased Intangibles

For the year ended December 31, 2024, there were no disposals or sales of purchased intangible assets.

Internally Developed

For the year ended December 31, 2024, the Company did not incur any capitalized development costs. Capital work in progress is included in other long-term assets in the consolidated balance sheet.

For the year ended December 31, 2023, the Company capitalized $0.9 million of internally developed software costs, primarily associated with upgrading our ITMS™ (Intelligent Technology Management System), next generation TDI™  application, secure identity management technology and secure network operations center of which $2.4 million was transferred from capital work in progress to internally developed software during the year ended December 31, 2023. Capital work in progress is included in other long-term assets in the consolidated balance sheet.

The aggregate amortization expense recorded was approximately $2,252,000 and $2,282,300 for the years ended December 31, 2024 and 2023, respectively.

No impairment charges were recorded for the year ended December 31, 2024. The Company recorded an impairment charge of $0.2 million to for the year ended December 31, 2023 as part of its impairment assessment of long-lived assets and reduced the impaired internally developed software assets to the estimated fair value and adjusted the remaining useful lives as applicable on those assets as of December 31, 2023.

As of December 31, 2024, estimated annual amortization for our intangible assets for each of the next five years and beyond is approximately:

2025	$	1,737,980
2026		1,032,204
2027		530,526
2028		503,106
2029		373,450
Thereafter		886,529
Total	$	5,063,795