Intangible Assets

6 Months Ended

Jun. 30, 2022

Intangible Assets

Intangible Assets

Note 3 — Intangible Assets

Effective September 30, 2020, the Company acquired 100% of the equity interests of Orange142 for a purchase price of $26,207,981. The acquisition of Orange142 was recorded by allocating the total purchase consideration to the fair value of the net tangible assets acquired, including goodwill and intangible assets, in accordance with ASC 805. The purchase consideration exceeded the fair value of the net assets, resulting in goodwill of $4,095,700 and intangible assets of $18,033,850. Intangible assets consist of $13,028,320 of 10-year amortizable customer relationships, $3,501,200 of 10-year amortizable trademarks and tradenames, and $1,504,330 of 5-year amortizable non-compete agreements. The Company records amortization expense on a straight-line basis over the life of the identifiable intangible assets. For the three months ended June 31, 2022 and 2021, amortization expense of $488,455 and $488,455, respectively, and for the six months ended June 30, 2022 and 2021, amortization expense of $976,909 and $976,909, respectively, was recognized, and as of June 30, 2022 and December 31, 2021, intangible assets net of accumulated amortization was $14,614,669 and $15,591,578, respectively.

As of June 30, 2022, intangible assets and the related accumulated amortization, weighted-average remaining life and future amortization expense are as follows:

				Trademarks and		Non-compete
	Customer lists		tradenames		agreements		Total
Fair value at acquisition date	$	13,028,320	$	3,501,200	$	1,504,330	$	18,033,850
Accumulated amortization		(2,279,956)		(612,710)		(526,515)		(3,419,181)
Intangibles, net	$	10,748,364	$	2,888,490	$	977,815	$	14,614,669
Estimated life (years)		10		10		5
Weighted-average remaining life (years)		8.3		8.3		3.3

	Total
2022		976,909
2023		1,953,818
2024		1,953,818
2025		1,878,602
2026		1,652,952
Thereafter		6,198,570
Total	$	14,614,669

The Company expects to deduct goodwill for tax purposes in future years. The factors that make up goodwill include entry into new markets not previously accessible and generation of future growth opportunities.