CISO Global, Inc. Goodwill & Intangibles Disclosure
NOTE 7 – INTANGIBLE ASSETS AND GOODWILL
Goodwill
The following table summarizes the changes in goodwill during the years ended December 31, 2024 and 2023, respectively:
| Balance as of December 31, 2022 | ||||
| Goodwill | $ | 71,525,609 | ||
| Accumulated impairment losses | (15,691,695 | ) | ||
| 55,833,914 | ||||
| Impairment losses | (35,933,364 | ) | ||
| Balance as of December 31, 2023 | ||||
| Goodwill | 71,525,609 | |||
| Accumulated impairment losses | (51,625,059 | ) | ||
| 19,900,550 | ||||
| Balance as of December 31, 2024 | ||||
| Goodwill | 71,525,609 | |||
| Accumulated impairment losses | (51,625,059 | ) | ||
| $ | 19,900,550 | |||
Intangible Assets
Intangible assets, net are summarized as follows:
| December 31, 2024 | ||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
| Tradenames – trademarks | $ | 3,835,981 | $ | (3,123,766 | ) | $ | 712,215 | |||||
| Customer base | 572,048 | (319,587 | ) | 252,461 | ||||||||
| Non-compete agreements | 487,400 | (484,120 | ) | 3,280 | ||||||||
| Intellectual property/technology | 2,455,879 | (1,621,621 | ) | 834,258 | ||||||||
| $ | 7,351,308 | $ | (5,549,094 | ) | $ | 1,802,214 | ||||||
| December 31, 2023 | ||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
| Tradenames – trademarks | $ | 3,835,981 | $ | (2,138,946 | ) | $ | 1,697,035 | |||||
| Customer base | 572,048 | (245,357 | ) | 326,691 | ||||||||
| Non-compete agreements | 487,400 | (450,181 | ) | 37,219 | ||||||||
| Intellectual property/technology | 2,455,879 | (970,244 | ) | 1,485,635 | ||||||||
| $ | 7,351,308 | $ | (3,804,728 | ) | $ | 3,546,580 | ||||||
Amortization expense of identifiable intangible assets was $1,744,366 and $1,809,687, for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, the weighted-average remaining amortization period for intangible assets was 2.28 years.
Based on the balance of intangibles assets at December 31, 2024, expected future amortization expense is as follows:
| 2025 | $ | 921,139 | ||
| 2026 | 709,464 | |||
| 2027 | 73,211 | |||
| 2028 | 49,200 | |||
| 2029 | 49,200 | |||
| $ | 1,802,214 |
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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.