| Goodwill and Intangible Assets, Net |
Note 5: 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 September 30, 2018,
the Company has not recognized any impairment to Goodwill.
Intangible Assets, Net
The Company
had the following intangible assets as of September 30, 2018 and December 31, 2017:
| |
|
September
30,
2018
|
|
|
December
31,
2017
|
|
| 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) |
|
|
272,528 |
|
|
|
251,171 |
|
| Intangible Assets, Gross |
|
|
2,207,035 |
|
|
|
2,185,678 |
|
| Less Accumulated Amortization (c) |
|
|
(367,274 |
) |
|
|
(329,398 |
) |
| Intangible Assets, Net |
|
$ |
1,839,761 |
|
|
$ |
1,856,280 |
|
| |
(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 September 30, 2018, 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 September 30, 2018, the Company has not recognized any impairment expense related to these assets. |
| |
(c) |
During the three
months ended September 30, 2018 and 2017, the Company recognized $9,560 and $12,756, respectively, in amortization expense
related to the Trademarks, Product Masters, and Other Intangible Assets. During the nine months ended September 30, 2018 and
2017, the Company recognized $37,876 and $43,771, respectively, in amortization expense related to the Trademarks, Product
Masters, and Other Intangible Assets. |
Expected future intangible asset
amortization as of September 30, 2018 is as follows:
| Fiscal Year: |
|
|
|
|
| 2018 |
|
$ |
9,600 |
|
| 2019 |
|
|
37,713 |
|
| 2020 |
|
|
37,132 |
|
| 2021 |
|
|
9,178 |
|
| 2022 |
|
|
1,861 |
|
| Remaining |
|
|
4,277 |
|
| Total |
|
$ |
99,761 |
|
|