| 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:
| Schedule of Goodwill |
|
|
|
| |
|
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:
| Schedule of Intangible Asset |
|
|
|
|
|
|
| |
|
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:
| Expected future intangible asset amortization |
|
|
|
| Fiscal Year: |
|
|
|
| Remaining 2021 |
|
$ |
276,655 |
|
| 2022 |
|
|
552,963 |
|
| 2023 |
|
|
549,018 |
|
| 2024 |
|
|
524,678 |
|
| Thereafter |
|
|
4,185,455 |
|
| Total |
|
$ |
6,088,769 |
|
|