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Intangible Assets and Goodwill
9 Months Ended
Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Goodwill
NOTE 5: INTANGIBLE ASSETS AND GOODWILL
 
Intangible assets consisted of the following as of September 30, 2022 (unaudited) and December 31, 2021: 
 
 
 
 
 
September 30, 2022
(unaudited)
 
 
December 31,
2021
 
Customer relationships
 
 
4.5– 15 years
 
 
$
9,535,000
 
 
$
9,025,000
 
Trade name
 
 
4.5 years
 
 
 
266,000
 
 
 
266,000
 
Trademark
 
 
10-15 years
 
 
 
533,863
 
 
 
533,863
 
Backlog
 
 
2-5 years
 
 
 
1,436,000
 
 
 
947,000
 
Non-compete agreement
 
 
3-5 years
 
 
 
684,000
 
 
 
674,000
 
 
 
 
 
 
 
 
12,454,863
 
 
 
11,445,863
 
Accumulated amortization
 
 
 
 
 
 
(5,323,003
)
 
 
(3,850,264
)
Intangible assets, net
 
 
 
 
 
$
7,131,860
 
 
$
7,595,599
 
 
The intangible assets with the exception of the trademarks were recorded as part of the acquisitions of Corvus, MFSI, Merrison, SSI, and LSG. Amortization expense for the nine months ended September 30, 2022 and 2021, was $1,472,740 and $1,123,590, respectively, and the intangible assets are being amortized based on the estimated future lives as noted above. On March 31, 2022, $275,000 of customer relationships was adjusted for the contingent consideration that is no longer required to be paid for the acquisition related to The Albers Group.
 
Future amortization of the intangible assets for the next five years as of September 30 are as follows:
 
September 30, 2023
 
$
1,969,588
 
September 30, 2024
 
 
1,653,245
 
September 30, 2025
 
 
985,482
 
September 30, 2026
 
 
721,751
 
September 30, 2027
 
 
526,950
 
Thereafter
 
 
1,274,844
 
Total
 
$
7,131,860
 
 
The activity of goodwill for the nine months ended September 30, 2022 (unaudited) and year ended December 31, 2021, is as follows:
 
 
2022
 
 
2021
 
Balance – beginning of period
 
$
14,062,964
 
 
$
4,136,011
 
Additions
 
 
1,471,000
 
 
 
9,926,953
 
Disposals
 
 
-
 
 
 
-
 
Impairment
 
 
-
 
 
 
-
 
 
 
$
15,533,964
 
 
$
14,062,964
 
 
When the Company acquires a controlling financial interest through a business combination, the Company uses the acquisition method of accounting to allocate the purchase consideration to the assets acquired and liabilities assumed, which are recorded at fair value. Any excess of purchase consideration over the net fair value of the net assets acquired is recognized as goodwill. The additions of goodwill in the respective periods relate to the acquisitions made by the Company. The Company has not disposed of any entities, nor has the Company recognized impairment on the goodwill in these periods.