GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

8.  GOODWILL AND INTANGIBLE ASSETS

Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers.

The following table sets forth the changes in the carrying amount of goodwill by reportable segment for the years ended December 31, 2023 and 2022: 

	Animation			Original Content			Consolidated
Balance, January 1, 2022	$	8,104,056		$	14,271,969		$	22,376,025
Measurement period adjustment		–			(468,426	)		(468,426	)
Impairment charge		(6,202,888	)		(5,137,227	)		(11,340,115	)
Balance, December 31, 2022		1,901,168			8,666,316			10,567,484
Impairment charge		(954,655	)		(3,921,451	)		(4,876,106	)
Balance, December 31, 2023	$	946,513		$	4,744,865		$	5,691,378

During the year ended December 31, 2022, the Company finalized the purchase price allocation, during the permissible measurement period, and obtained new fair value information for certain identifiable intangible assets related to its acquisition of CIM. The revised purchase price allocation decreased goodwill by $468,426 and increased intangible assets by $468,426. Additionally, the Company recorded amortization expense of $24,641 related to intangible assets subject to amortization during the year ended December 31, 2022 (of which $7,247 corresponded to the year ended December 31, 2021). These adjustments did not have a significant impact on the Company’s operations for the year ended December 31, 2022. The following table summarizes the individually identifiable intangible assets recognized:

Licensing agreements	$	341,728
Books and stories content		126,698
Total new fair value information for certain identifiable intangible assets	$	468,426

At December 31, 2023, the Company performed its annual impairment tests as prescribed by ASC 350 on the carrying value of its goodwill and recorded aggregate impairment charges of $4,876,106; of which $954,655 was attributed to its TD Holdings Ltd animation business acquired in 2016, and $3,921,451 was attributed to its CIM original content business acquired in 2021. The determination was made as the result of the Company’s qualitative assessment of each business unit, including the decline in animation revenues and delay in monetization of original content properties.

At December 31, 2022, the Company performed its annual impairment tests as prescribed by ASC 350 on the carrying value of its goodwill and recorded aggregate impairment charges of $11,340,115; of which $6,202,888 was attributed to its TD Holdings Ltd animation business acquired in 2016, and $5,137,227 was attributed to its CIM original content business acquired in 2021. The determination was made as the result of the Company’s qualitative assessment of each business unit, including the decline in animation revenues and delay in monetization of original content properties.

At December 31, 2023 and 2022, the carrying amount of the Company’s goodwill was $5,691,378 and $10,567,484, respectively.

The following table sets forth the components of the Company’s intangible assets at December 31, 2023 and 2022:

			December 31, 2023							December 31, 2022
	Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization			Net Book Value
Intangible assets subject to amortization:
Customer relationships		10.00	$	1,526,282	$	(1,144,711	)	$	381,571	$	1,526,282	$	(992,083	)	$	534,199
Licensing agreement		19.60		341,728		(42,035	)		299,693		341,728		(24,641	)		317,087
Subtotal				1,868,010		(1,186,746	)		681,264		1,868,010		(1,016,724	)		851,286
Intangible assets not subject to amortization:
Books and stories content				126,698		–			126,698		126,698		–			126,698
Trade names				4,386,247		–			4,386,247		4,386,247		–			4,386,247
Total intangible assets			$	6,380,955	$	(1,186,746	)	$	5,194,209	$	6,380,955	$	(1,016,724	)	$	5,364,231

For the years ended December 31, 2023 and 2022, the Company recorded amortization expense for intangible assets subject to amortization of $170,022, respectively.

The following table provides information regarding estimated amortization expense for intangible assets subject to amortization for each of the following years ending December 31:

2024	$	170,022
2025		170,022
2026		93,708
2027		17,394
2028		17,393
Thereafter		212,724
Total	$	681,264