Note 6 - Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

6. 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. Goodwill acquired in a business combination and determined to have an indefinite useful life is not amortized, but instead is tested for impairment at least annually in accordance with ASC 350. The following table represents the change in the carrying value of goodwill for the three months ended June 30, 2020:

(In thousands)
Balance as of December 31, 2019	$	33,637
Correction of an error related to CBS goodwill		(131	)
Balance as of June 30, 2020	$	33,506

We adjusted goodwill from the CBS Acquisition related to an immaterial error of $131,000 in payables that were paid during closing and incorrectly recorded as liabilities in our purchase price accounting as of December 31, 2019. We reduced our goodwill and accounts payable by $131,000.

Intangible Assets

Intangible assets, net consisted of the following at June 30, 2020:

(In thousands, except weighted average useful life)	June 30, 2020
Finite-lived intangible assets:	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Useful Life (in years)
Customer Relationships	$	800	$	(124	)	$	676		4.8
Tradenames		2,590		(289	)		2,301		7.2
Technology – acquired (1)		19,670		(2,059	)		17,611		7.6
Total intangible assets	$	23,060	$	(2,472	)	$	20,588		7.4

(1)   We transferred $650,000 out of “in-process R&D” into “Technology – acquired” on April 1, 2020, which was the date on which the product line became technologically feasible.

Intangible assets, net consisted of the following at December 31, 2019:

(In thousands, except weighted average useful life)	December 31, 2019
Finite-lived intangible assets:	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Useful Life (in years)
Customer Relationships	$	800	$	(51	)	$	749		5.6
Tradenames		2,590		(123	)		2,467		8.1
Technology – acquired		19,020		(904	)		18,116		8.4
In-process R&D (2)		650		—			650		9.0
Total intangible assets	$	23,060	$	(1,078	)	$	21,982		8.3

(2)   In-process R&D represents the fair value of incomplete research and development that has not yet reached technological feasibility. On April 1, 2020, we began amortizing the asset since it reached technological feasibility (see footnote 1 above).

Amortization expense for finite-lived intangible assets was $706,000 and $1.4 million for the three and six months ended June 30, 2020, respectively and $104,000 for the three and six months ended June 30, 2019. In-process research and development was put into service in the second quarter of 2020, as such we have included the amortization in the schedule below based on an estimated life of 9 years. As of June 30, 2020, the Company expects to record the following amortization expense:

(In thousands) For the Years Ended December 31,	Estimated Amortization Expense
2020 (6 months remaining)	$	1,412
2021		2,825
2022		2,825
2023		2,795
2024		2,770
Thereafter		7,961
Total	$	20,588