Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

v3.20.4
Goodwill and Intangible Assets
12 Months Ended
Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS

NOTE 5 – GOODWILL AND INTANGIBLE ASSETS

Goodwill

Goodwill represents the difference between the purchase price and the estimated fair value of identifiable assets acquired and liabilities assumed. The Company performs an impairment analysis related to goodwill as of December 31st of each year, or when the Company identifies certain triggering events or circumstances that would more likely than not reduce the estimated fair value of the goodwill below its carrying amount.

In the first quarter of 2020, the Company performed a quantitative goodwill impairment test utilizing the single-step approach to compare the carrying value of the reporting unit to its estimated fair value. The estimated fair value of the reporting unit was determined using a guideline public company method, a form of the market approach. The guideline public company method utilized the trading multiples of similarly traded public companies as they related to our operating metrics. Based on the impairment test, the Company determined that goodwill was not impaired as the reporting unit’s carrying value, after accounting for the impairment charges of long-lived assets, did not exceed the reporting unit’s fair value.

As of December 31, 2020, the Company performed the qualitative analysis of the goodwill impairment assessment by reviewing relevant qualitative factors. The Company determined there were no events that would indicate the carrying amount of its goodwill may not be recoverable, and as such, no impairment charge was recorded.

Intangible Assets

Intangible assets consisted of the following:

 

 

 

Estimated

Useful

Life (in

years)

 

Gross

Carrying

Value

 

 

Accumulated

Amortization

 

 

Net Book

Value

 

As of December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks

 

10

 

$

1,415

 

 

$

156

 

 

$

1,259

 

Patents

 

20

 

 

12,775

 

 

 

568

 

 

 

12,207

 

 

 

 

 

$

14,190

 

 

$

724

 

 

$

13,466

 

As of December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks

 

10

 

 

3,132

 

 

 

913

 

 

 

2,219

 

Patents

 

20

 

 

22,955

 

 

 

3,348

 

 

 

19,607

 

 

 

 

 

$

26,087

 

 

$

4,261

 

 

$

21,826

 

 

The intangible assets are amortized over the period the Company expects to receive the related economic benefit. Amortization expense related to amortizable intangible assets was $1,090 and $6,064 for the year ended December 31, 2020, and 2019,

respectively.

 

As discussed above, the Company identified a triggering event in the first quarter of 2020 and performed a quantitative impairment test on long-lived assets. The expected present value method, a form of the income approach, was utilized to determine the fair value of long-lived assets. This method is based on expected cash flows using a risk-adjusted discount rate, which reflects the weighted average cost of capital of similarly traded public companies. As a result of the impairment test performed, the Company recorded in the first quarter of 2020 an impairment charge of $7.2 million to reduce the carrying value of intangible assets from $21.4 million to $14.2 million, representing its fair value on the date of impairment.

 

As of December 31, 2020, the Company determined there were no events that would indicate the carrying amount of these assets may not be recoverable, and as such, no further impairment charge was recognized.

The estimated amortization expense for future periods is as follows:

 

Fiscal Year

 

Estimated

Amortization

Expense

 

2021

 

$

966

 

2022

 

 

966

 

2023

 

 

966

 

2024

 

 

966

 

2025

 

 

966

 

Thereafter

 

 

8,636

 

Total

 

$

13,466