Note 11 – Goodwill and Intangible Assets

Goodwill

The following table sets forth changes in our goodwill for the years ended December 31, 2025 and 2024:

Balance, January 1, 2024	$	12,729,056
Impairment expense		(9,567,000	)
Foreign currency translation adjustment		(365,677	)
Balance, January 1, 2025		2,796,379
Impairment expense		(668,818	)
Foreign currency translation adjustment		120,513
Balance, December 31, 2025	$	2,248,074

Management reviewed goodwill for impairment in accordance with its accounting policies. As a result of this analysis, during the years ended December 31, 2025 and 2024, the Company determined that the fair value of a reporting unit was less than its carrying amount, resulting in the recognition of goodwill impairment charges of $0.67 million and $9.57 million, respectively. The reductions in fair value were primarily attributable to a decline in revenues from the prior year. It is reasonably possible that a decline in market or economic conditions, or changes in the estimates or underlying assumptions used in the determination of the reporting unit's fair value as of December 31, 2025, could lead to an additional impairment of goodwill in the near term.

Intangible Assets

Intangible assets consist of the following:

	As of December 31, 2025
	Original Cost		Accumulated Amortization			Accumulated Impairment Losses			Foreign Currency Translation Adjustment		Carrying Value

Trademarks	$	41,145	$	(27,197	)	$	(13,948	)	$	-	$	-
Software licenses		565,000		(207,174	)		(357,826	)		-		-
Software development costs		202,870		(47,346	)		(155,524	)		-		-
Mobile games licenses		158,768		(68,895	)		-			2,229		92,102
Customer relationships		5,584,127		(1,193,626	)		(2,646,389	)		73,321		1,817,433
Total intangible assets	$	6,551,910	$	(1,544,238	)	$	(3,173,687	)	$	75,550	$	1,909,535

	As of December 31, 2024
	Original Cost		Accumulated Amortization			Accumulated Impairment Losses			Foreign Currency Translation Adjustment			Carrying Value

Trademarks	$	41,145	$	(22,809	)	$	-		$	-		$	18,336
Software licenses		565,000		(207,174	)		(357,826	)		-			-
Software development costs		202,870		(6,770	)		-			-			196,100
Mobile games licenses		158,768		(36,417	)		-			(4,561	)		117,790
Customer relationships		5,584,127		(640,267	)		-			(160,400	)		4,783,460
Total intangible assets	$	6,551,910	$	(913,437	)	$	(357,826	)	$	(164,961	)	$	5,115,686

Intangible assets consist of the Allied Esports trademarks, which are being amortized over a useful life of 10 years, AGAE software licenses and software development costs, which are being amortized over a useful life of 5 years, and AME mobile games licenses and customer relationships, which are being amortized over a useful life of 5-10 years. The initial term of the software license agreement expires on February 27, 2028, but can be renewed by the Company for an additional 5-year term under identical terms and conditions. At December 31, 2024, the carrying value of the software license was fully impaired based on a reduction of management’s estimate of the undiscounted future cash flows to be generated by this asset, resulting from a delay in the implementation of a marketing plan to promote the games associated with this license. The mobile game license agreement, as amended on April 7, 2025 expires on July 31, 2028. During the years ended December 31, 2025 and 2024, amortization expense amounted to $630,800 and $669,280, respectively. During the year ended December 31, 2025, the Company recorded an impairment expense on its definite lived intangible assets of $2,815,859, see Note 3, Impairment of Long-Lived Assets. The weighted average remaining amortization period at December 31, 2025 was 7.6 years.

Estimated future amortization is as follows:

Years Ended December 31,	Amount
2026	$	269,712
2027		269,712
2028		263,772
2029		234,072
2030		234,470
Thereafter		637,797
	$	1,909,535