Annual report pursuant to Section 13 and 15(d)

Goodwill

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Goodwill
12 Months Ended
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill

Note 11 - Goodwill

 

The Company has recorded goodwill and other indefinite-lived assets in connection with its acquisition of Shoom, Locality and Jibestream. Goodwill, which represents the excess of acquisition cost over the fair value of the net tangible and intangible assets of the acquired company, is not amortized. Indefinite-lived intangible assets are stated at fair value as of the date acquired in a business combination. The Company's goodwill balance and other assets with indefinite lives were evaluated for potential impairment during the years ended December 31, 2019 and 2018, as certain indications on a qualitative and quantitative basis were identified that an impairment exists as of the reporting date.

 

During the years ended December 31, 2019 and 2018, the Company recognized $0 and $636,000 of impairment charges, respectively. The impairment charge was primarily precipitated by the continued decline in Company's stock price during those years, accumulated losses and the lack of required working capital to fund our continuing operations. The Company used a market approach to determine if the carrying amounts of the Company's reporting units exceeded the fair value of the Company.

 

During the year ended December 31, 2019, the corporate income tax returns were filed for the periods ending as of the acquisition dates of Locality and Jibestream. After reviewing those tax returns, it was determined that there were additional tax benefits the Company would receive primarily related to net operating losses and research tax credits. As a result, the deferred tax asset of Jibestream was increased by approximately $1,023,000 and the deferred tax asset of Locality was increased by $48,000 with a corresponding decrease to goodwill. Additionally, during the year ended December 31, 2019, upon receipt of the Locality valuation report, the values of the intangibles were updated with a corresponding $80,000 increase to goodwill.

 

The following table summarizes the changes in the carrying amount of Goodwill for the year ended December 31, 2019 (in thousands):

 

    Shoom     Locality     Jibestream     Total  
                         
Balance as of January 1, 2018   $ 636     $ --     $ --     $ 636  
Goodwill impairment (level 3 fair value adjustment)     (636 )     --       --       (636 )
Balance as of December 31, 2018     --       --       --       --  
Goodwill additions through acquisitions     --       619       2,407       3,026  
Valuation Measurement Period Adjustments     --       80       --       80  
Tax Provision Measurement Period Adjustments     --       (46 )     (919 )     (965 )
Adjusted Allocation     --       653       1,488       2,141  
Exchange rate fluctuation at December 31, 2019     --       19       (90     (71
Balance as of December 31, 2019   $ --     $ 672     $ 1,398     $ 2,070