BIO KEY INTERNATIONAL INC Goodwill & Intangibles Disclosure
NOTE G—INTANGIBLE ASSETS AND GOODWILL
Intangible assets consisted of the following as of December 31:
| 2024 | 2023 | |||||||
| Trade name | $ | 130,000 | $ | 130,000 | ||||
| Proprietary software | 420,000 | 420,000 | ||||||
| Customer relationships | 1,692,860 | 1,692,860 | ||||||
| Patents and patents pending | 365,080 | 365,080 | ||||||
| 2,607,940 | 2,607,940 | |||||||
| Less accumulated amortization | (1,510,310 | ) | (1,199,950 | ) | ||||
| Total | $ | 1,097,630 | $ | 1,407,990 | ||||
Aggregate amortization expense for 2024 and 2023 was approximately $310,000 and $355,000, respectively. Estimated minimum amortization expense based on straight line amortization of the software license rights for each of the next five years and thereafter approximates the following:
| Years ending December 31 | ||||
| 2025 | $ | 267,000 | ||
| 2026 | $ | 224,000 | ||
| 2027 | $ | 223,000 | ||
| 2028 | $ | 141,000 | ||
| 2029 | $ | 117,000 | ||
| Thereafter | $ | 125,630 | ||
| Total | $ | 1,097,630 |
Goodwill
The Company concluded the amounts in goodwill had been fully impaired and accordingly wrote-off the entire balance in full for the Swivel Secure Europe LTD acquisition, due the reversal of the earnout payable based on the 2022 revenue achievement as at December 31, 2022.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Apr 23, 2025 | Showing above |
| 2023 | Jun 5, 2024 | |
| 2022 | Jun 1, 2023 | |
| 2020 | Mar 29, 2021 | |
| 2019 | May 14, 2020 | |
| 2018 | Apr 1, 2019 | |
| 2016 | Mar 31, 2017 | |
| 2015 | Mar 30, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.