Goodwill

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Note 5 - Goodwill

As of June 30, 2020 and December 31, 2019, goodwill was $7,366,000 and $7,907,000, respectively. As of June 30, 2020, goodwill was comprised of $7,366,000 recorded in connection with the October 1, 2019 acquisition of Oblong Industries. As of December 31, 2019, goodwill was comprised of (i) $7,366,000 recorded in connection with the October 1, 2019 acquisition of Oblong Industries and (ii) $541,000 related to the Glowpoint reporting unit as discussed below.

We test goodwill for impairment on an annual basis on September 30 of each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. Following the acquisition of Oblong Industries, the Company operated two reporting units, Glowpoint and Oblong Industries. During the six months ended June 30, 2020, we considered the novel Coronavirus (COVID-19) pandemic and resulting declines in certain of the Company’s revenue to be a triggering event for an interim goodwill impairment test for both reporting units as of March 31, 2020. To determine the fair value of each reporting unit, as of March 31, 2020 for the goodwill impairment tests, we used a weighted average of the discounted cash flow method and a market-based method (comparing the Company’s equity and analyzing multiples of revenue for comparable companies). For the Oblong Industries reporting unit, the fair value of the

reporting unit exceeded its carrying amount, therefore no impairment charge was required for the three or six months ended June 30, 2020. For the Glowpoint reporting unit, we recorded an impairment charge on goodwill of $541,000 at March 31, 2020 as the carrying amount of the reporting unit exceeded its fair value on the test date. This charge is recognized as “Impairment Charges” on our condensed consolidated Statements of Operations.

The activity in goodwill during the six months ended June 30, 2020 and the year ended December 31, 2019 is shown in the following table ($ in thousands):


Goodwill	Glowpoint		Oblong Industries		Total
Balance December 31, 2018	$	2,795	$	—	$	2,795
Impairment charges	(2,254)		—		(2,254)
Acquisition	—		7,366		7,366
Balance December 31, 2019	541		7,366		7,907
Impairment charges	(541)		—		(541)

Balance June 30, 2020	$	—	$	7,366	$	7,366

In the event we experience future declines in our revenue, cash flows and/or stock price, this may give rise to a triggering event that may require the Company to record additional impairment charges on goodwill in the future.