Quarterly report pursuant to Section 13 or 15(d)

5. Goodwill and Intangible Assets, Net

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5. Goodwill and Intangible Assets, Net
6 Months Ended
Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, Net

Goodwill

 

In connection with the Merger in 2013, the Company recognized $10,365,805 in Goodwill, representing the excess of the fair value of the consideration for the Merger over net identifiable assets acquired. Pursuant to FASB ASC 350-20, Goodwill is not subject to amortization but is subject to annual review to determine if certain events warrant impairment to the Goodwill asset. Through June 30, 2017, the Company has not recognized any impairment to Goodwill.

 

Intangible Assets, Net

 

The Company had the following intangible assets as of June 30, 2017 and December 31, 2016:

 

    June 30, 2017     December 31, 2016  
Identifiable Artistic-Related Assets (a)   $ 1,740,000     $ 1,740,000  
Trademarks (b)     129,831       129,831  
Product Masters (b)     64,676       64,676  
Other Intangible Assets (b)     185,020       185,020  
Intangible Assets, Gross     2,119,527       2,119,527  
Less Accumulated Amortization (c)     (304,889 )     (273,877 )
Intangible Assets, Net   $ 1,814,638     $ 1,845,650  

 

 

  (a) In connection with the Merger in 2013, the Company acquired $1,740,000 of Identifiable Artistic-Related Assets. These assets, related to certain properties owned by A Squared and assumed by the Company, were valued using an independent firm. Based on certain legal, regulatory, contractual, and economic factors, the Company has deemed these assets to be indefinite-lived. Hence, pursuant to FASB ASC 350-30, these assets are not subject to amortization and are tested annually for impairment. Through June 30, 2017, the Company has not recognized any impairment expense related to these assets.
  (b) Pursuant to FASB ASC 350-30-35, the Company reviews these intangible assets periodically to determine if the value should be retired or impaired due to recent events. Through June 30, 2017, the Company has not recognized any impairment expense related to these assets.
  (c) During the three months ended June 30, 2017 and 2016, the Company recognized $13,315 and $19,184, respectively, in amortization expense related to the Trademarks, Product Masters, and Other Intangible Assets. During the six months ended June 30, 2017 and 2016, the Company recognized $31,012 and $38,315, respectively, in amortization expense related to the Trademarks, Product Masters, and Other Intangible Assets.

 

Expected future intangible asset amortization as of June 30, 2017 is as follows:

 

Fiscal Year:      
2017   $ 24,508  
2018     26,119  
2019     9,236  
2020     8,655  
2021     2,059  
Remaining     4,061  
Total   $ 74,638