Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets, Net

v3.21.2
Goodwill and Intangible Assets, Net
6 Months Ended
Jun. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, Net

Note 8: Goodwill and Intangible Assets, Net

 

Goodwill

 

In 2013, the Company recognized $10,365,806 in goodwill, representing the excess of the fair value of the consideration for the merger with A Squared 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.

 

As a result of the ChizComm acquisition, the consideration exceeded the fair value of the assets acquired by $9,607,027. Accordingly, this amount was recorded as goodwill at the time of the acquisition. Through June 30, 2021, the Company has not recognized any impairment on goodwill.

 

The following table represents details of our goodwill balance: 

     
    Total  
Goodwill as of December 31, 2020   $ 10,365,806  
Acquisition of ChizComm Entities     9,607,027  
Foreign Currency Translation Adjustment     22,203  
Goodwill as of June 30, 2021   $ 19,995,036  

 

Intangible Assets, Net

 

The Company had the following intangible assets as of June 30, 2021 and December 31, 2020: 

           
   

June 30,

2021

   

December 31,

2020

 
Trademarks (a)   $ 129,831     $ 129,831  
Trade Name (b)     3,430,000        
Customer Relations (c)     6,140,000        
Non-Compete (d)     60,000        
Other Intangible Assets (a)     304,028       299,028  
Intangible Assets, Gross     10,063,859       428,859  
Foreign Currency Translation Adjustment     89,202        
Less Accumulated Amortization     (634,292 )     (400,165 )
Intangible Assets, Net   $ 9,518,769     $ 28,694  

 

  (a) 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. During the three months ended June 30, 2021 and June 30, 2020, the Company recognized, $8,276 and $10,847, respectively, in amortization expense related to the Trademarks, Product Masters, and Other Intangible Assets. During the six months ended June 30, 2021 and June 30, 2020, the Company recognized, $11,131 and $21,638, respectively, in amortization expense related to the Trademarks, Product Masters, and Other Intangible Assets. 
  (b) Amount represents fair value of the ChizComm and ChizComm Beacon Media Trade Names which have been determined to have an indefinite useful life.
  (c) Amount represents fair value of the ChizComm and ChizComm Beacon Media Customer Relationships with a useful life of 12 years. Amortization expense for the three and six months ended June 30, 2021 was $129,277 and $214,610, respectively.
  (d) Amount represents fair value of the Non-Compete agreements as part of the ChizComm acquisition. The Non-Compete agreements have a useful life of 3 years. Amortization expense for the three and six months ended June 30, 2021 was $5,053 and $8,386, respectively.

 

Expected future intangible asset amortization as of June 30, 2021 is as follows:

 

     
Fiscal Year:      
Remaining 2021   $ 276,655  
2022     552,963  
2023     549,018  
2024     524,678  
Thereafter     4,185,455  
Total   $ 6,088,769