| 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 September 30, 2021, the Company has not
recognized any impairment on goodwill. The Company will perform its annual review of goodwill during the fourth quarter.
The following table summarizes the changes in
the carrying amount of goodwill by reportable segment:
| Schedule of Goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Content Production & Distribution |
|
|
Media & Advertising Services |
|
|
Total |
|
| Goodwill as of December 31, 2020 |
|
$ |
10,365,806 |
|
|
$ |
– |
|
|
$ |
10,365,806 |
|
| Acquisition of ChizComm Entities |
|
|
– |
|
|
|
9,607,027 |
|
|
|
9,607,027 |
|
| Foreign Currency Translation Adjustment |
|
|
– |
|
|
|
3,999 |
|
|
|
3,999 |
|
| Goodwill as of September 30, 2021 |
|
$ |
10,365,806 |
|
|
$ |
9,611,026 |
|
|
$ |
19,976,832 |
|
Intangible Assets, Net
The Company had the following intangible assets
as of September 30, 2021 and December 31, 2020:
| Schedule of Intangible Asset |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
September 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 |
|
|
15,353 |
|
|
|
– |
|
| Less Accumulated Amortization |
|
|
(768,912 |
) |
|
|
(400,165 |
) |
| Intangible Assets, Net |
|
$ |
9,310,300 |
|
|
$ |
28,694 |
|
| |
(a) |
Pursuant to ASC 350-30, General Intangibles Other than Goodwill, 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 September 30, 2021 and September 30, 2020, the Company recognized, $2,757 and $13,013, respectively, in amortization expense related to the Trademarks, Product Masters, and Other Intangible Assets. During the nine months ended September 30, 2021 and September 30, 2020, the Company recognized, $13,888 and $34,651, 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 nine months ended September 30, 2021 was $128,083 and $341,553, 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 nine months ended September 30, 2021 was $5,006 and $13,350, respectively. |
Expected future intangible asset amortization as of September 30,
2021 is as follows:
| Expected future intangible asset amortization |
|
|
|
|
| |
|
|
|
| Fiscal Year: |
|
|
|
| Remaining 2021 |
|
$ |
135,725 |
|
| 2022 |
|
|
542,900 |
|
| 2023 |
|
|
538,955 |
|
| 2024 |
|
|
514,703 |
|
| Thereafter |
|
|
4,148,017 |
|
| Total |
|
$ |
5,880,300 |
|
|