Note 5 - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

5.     GOODWILL AND OTHER INTANGIBLE ASSETS

Impairment testing

U.S. GAAP requires that both indefinite-lived intangible assets and goodwill are tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not (i.e., a likelihood greater than 50%) that the intangible asset or the reporting unit is impaired. During interim periods, ASC 350 requires companies to focus on those events and circumstances that affect the significant inputs used to determine the fair value of the asset group or reporting unit to determine whether an interim quantitative impairment test is requires.

The Company performed its annual impairment test for goodwill and intangible assets as of the last day of the fourth quarter. The Company first assessed certain qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible assets is less than its carrying amount, and whether it is therefore necessary to perform the quantitative impairment test. For CAD Enterprises, the Company performed a quantitative impairment test, including a discounted cash flow model and peer comparison. As a result of the impairment testing, it was determined that no indefinite-lived intangible assets or goodwill was impaired.

Intangible assets relate to the purchase of businesses. Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill increased related to acquisitions by approximately $2.9 million and $1.7 million, during 2021 and 2020, respectively (see note 15). Goodwill is not amortized, but is reviewed on an annual basis for impairment. Amortization of other intangible assets is calculated on a straight-line basis over periods ranging from one year to 15 years. Intangible assets consist of the following:

	December 31, 2021		December 31, 2020
Customer Intangibles	$	8,741,000	$	7,700,000
Non-Compete Agreements		200,000		200,000
Trademarks		3,599,149		1,930,000
Total Other Intangibles		12,540,149		9,830,000
Less: Accumulated Amortization		3,203,585		2,271,691
Other Intangibles, Net	$	9,336,564	$	7,558,309

Intangible amortization expense was as follows:

	December 31, 2021		December 31, 2020
Accumulated amortization at the beginning of the period	$	2,271,691	$	1,559,162
Amortization expense		931,894		712,529
Accumulated amortization at end of period	$	3,203,585	$	2,271,691

Intangible amortization for the next five years is as follows:

	Amortization in future periods
2022		993,581
2023		976,915
2024		976,915
2025		976,915
2026		902,900