INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 6 – INTANGIBLE ASSETS

Intangible assets consist of proprietary developed software, intellectual property, customer lists and acquired contracts carried at cost less accumulated amortization and customer lists acquired at fair value less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives.

On January 1, 2022 (“Effective Date”), the Company entered into an asset purchase agreement with Dynamic Tech Services, Inc (“DTS”) to acquire certain assets of DTS. The purchase price for the Acquired Assets was $1,335,000, $500,000 of which was paid in cash and $835,000 of which was paid through the issuance of a four-year $835,000 promissory note dated January 1, 2022, paying interest at the rate of 3.25% per annum (see Note 11).

On January 19, 2022, SWK acquired the customer list of NEO3, LLC (“NEO3”) pursuant to an Asset Purchase Agreement for the customer list for $150,000 cash and the issuance of a promissory note in the aggregate principal amount of $75,000 (the “NEO3 Note”). The NEO3 Note is due in 36 months from the closing date and bears interest at a rate of two percent (2.0%) per annum. Monthly payments including interest are $2,148. The purchase price has been recorded as an intangible asset with an estimated life of seven years.

The components of intangible assets are as follows:

	March 31, 2023			December 31, 2022			Estimated Useful Lives
Proprietary developed software	$	390,082		$	390,082		5 –7
Intellectual property, customer list, and acquired contracts		7,743,283			7,743,283		5 –15
Total intangible assets		8,133,365			8,133,365
Less: accumulated amortization		(4,029,973	)		(3,868,012	)
	$	4,103,392		$	4,265,353

Amortization expense related to the above intangible assets for the three months ended March 31, 2023 and 2022 was $161,961 and $190,457, respectively.

The Company expects future amortization expense to be the following:

	Amortization
Remainder of 2023	$	485,883
2024		647,844
2025		644,367
2026		633,165
2027		619,516
Thereafter		1,072,617
Total	$	4,103,392