GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following is a summary of activity of goodwill for the years ended December 31, 2022 and 2021: 

	Goodwill
Balances at December 31, 2020	$	–
Business combinations		17,296,810
Foreign exchange translation		(208,309	)
Balances at December 31, 2021		17,088,501
Impairment (see Note 2)		(9,519,143	)
Foreign exchange translation		(1,107,205	)
Balances at December 31, 2022	$	6,462,153

Intangible Assets, Net

In connection with the Optilan acquisition, the Company recognized an intangible asset, a trade name, of $4,033,638. The trade name has a useful life of 25 years.

During the Company’s impairment analysis at December 31, 2022 (see Note 2), the Company recorded impairment of the trade name of $2,703,456.

The following is a summary of intangible assets, net: 

	December 31,
	2022			2021
Trade name per business combination	$	4,033,638		$	4,033,638
Impairment		(2,703,456	)		–
Less: accumulated amortization		(161,346	)		–
Foreign exchange translation		(778,506	)		(147,050	)
Intangible assets, net	$	390,330		$	3,886,588

Amortization expense was $161,346 and $0 for the years ended December 31, 2022 and 2021, respectively.

Future amortization expense as of December 31, 2022 is as follows:

Years Ended December 31,
2023	$	53,207
2024		53,207
2025		53,207
2026		53,207
2027		53,207
Thereafter		124,295
	$	390,330

Patents - Intrusion Detection Intellectual Property

The Company relies on patent laws and restrictions on disclosure to protect its intellectual property rights. As of December 31, 2022 and 2021, the Company held three U.S. and foreign patents on its intrusion detection technology, which expire in calendar years 2025 through 2034 (depending on the payment of maintenance fees).

The DPTI issued patents cover a System and Method for Brillouin Analysis, a System and Method for Resolution Enhancement of a Distributed Sensor, and a Flexible Fiber Optic Deformation System Sensor and Method. Maintenance of intellectual property rights and the protection thereof is important to our business. Any patents that may be issued may not sufficiently protect the Company's intellectual property and third parties may challenge any issued patents. Other parties may independently develop similar or competing technology or design around any patents that may be issued to the Company. The Company cannot be certain that the steps it has taken will prevent the misappropriation of its intellectual property, particularly in foreign countries where the laws may not protect proprietary rights as fully as in the United States. Further, the Company may be required to enforce its intellectual property or other proprietary rights through litigation, which, regardless of success, could result in substantial costs and diversion of management's attention. Additionally, there may be existing patents of which the Company is unaware that could be pertinent to its business, and it is not possible to know whether there are patent applications pending that the Company's products might infringe upon, since these applications are often not publicly available until a patent is issued or published. 

For the years ended December 31, 2022 and 2021, the Company had patent amortization costs on its intrusion detection technology totaling $75,087 and $51,028, respectively. Patents costs are being amortized over the remaining life of each patent, which is from 7 to 16 years.

The following is a summary of the DPTI patents as of December 31, 2022 and 2021: 

	December 31,
	2022			2021
Patents	$	904,269		$	904,269
Less: accumulated amortization		(636,394	)		(561,307	)
Patents, net	$	267,875		$	342,962

Future expected amortization of patents is as follows: 

As of December 31,
2023	$	51,028
2024		51,028
2025		51,028
2026		51,028
2027		51,028
Thereafter		12,735
	$	267,875