Goodwill and Intangible Assets

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 8.    Goodwill and Intangible Assets

Goodwill

Changes in the carrying value of goodwill consist of following:

	Nine months ended	Year Ended
	September 30, 2019	December 31, 2018
At the beginning of the year	704,884	—
Goodwill Acquired1	9,323,189	704,884
At the end of the period	10,028,073	704,884

Note

1 The change in carrying amount of goodwill in the current year was the result of the acquisition of DBOT as disclosed in Note 5(f).

Intangible Assets

Information regarding amortizing and indefinite lived intangible assets consisted of the following:

		September 30, 2019								December 31, 2018
	Weighted	Gross				Accumulated				Gross				Accumulated
	Average Remaining	Carry		Accumulated		Impairment		Net		Carry		Accumulated		Impairment		Net
	Useful Life	Amount		Amortization		Loss		Balance		Amount		Amortization		Loss		Balance
Amortizing Intangible Assets
Animation Copyright (Note 14 (b))	—	$	—	$	—	$	—	$	—	$	301,495	$	(64,606)	$	—	$	236,889
Software and licenses	—		97,308		(97,308)		—		—		97,308		(93,251)		—		4,057
SolidOpinion IP (Note 5 (a))	4.4		4,655,000		(543,084)		—		4,111,916		—		—		—		—
Fintalk intangible assets (Note 5 (b))	4.8		6,350,000		(317,500)		—		6,032,500		—		—		—		—
Influencer network	8.9		1,980,000		(214,500)		—		1,765,500		1,980,000		(66,000)		—		1,914,000
Customer contract1	2.0		558,830		(185,458)		—		373,372		500,000		(55,556)		—		444,444
Continuing Membership Agreement1	19.8		8,255,440		(103,193)		—		8,152,247		—		—		—		—
Trade name	13.9		110,000		(7,944)		—		102,056		110,000		(2,444)		—		107,556
Technology platform	5.9		290,000		(44,881)		—		245,119		290,000		(13,808)		—		276,192
Total amortizing intangible assets		$	22,296,578	$	(1,513,868)	$	—	$	20,782,710	$	3,278,803	$	(295,665)	$	—	$	2,983,138
Indefinite lived intangible assets
Website name			159,504		—		(134,290)		25,214		159,504		—		(134,290)		25,214
Patent			28,000		—		—		28,000		28,000		—		—		28,000
GTB (Note 14 (b))			61,124,407		—		—		61,124,407		—		—		—		—
Total intangible assets		$	83,608,489	$	(1,513,868)	$	(134,290)	$	81,960,331	$	3,466,307	$	(295,665)	$	(134,290)	$	3,036,352

Note

1 During the third quarter of 2019, the Company completed the acquisition of additional shares in DBOT which increased its ownership in DBOT to 99.04%.  $8,314,270 of intangible assets were recognized on the date of acquisition as disclosed in Note 5(f).

Amortization expense relating to intangible assets was $764,010 and $276,692 for the three months ended September 30, 2019 and 2018 and $1,317,419 and $281,796 for the nine months ended September 30, 2019 and 2018, respectively.

The following table outlines the expected amortization expense for the following years:

	Amortization
	to be
Years ending December 31,	recognized
2019 (excluding the nine months ended September 30, 2019)	$	761,702
2020		3,046,811
2021		2,991,255
2022		2,870,339
2023		2,860,534
2024 and thereafter		8,252,069
Total amortization to be recognized	$	20,782,710

Note 9.    Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2017 were as follows:

	Wecast business
Balance as of December 31, 2017	$	—
Acquisitions		704,884
Foreign currency translation and other adjustments		—
Balance as of December 31, 2018	$	704,884

Intangible Assets

Information regarding amortizing and indefinite lived intangible assets consisted of the following:

			December 31, 2018								December 31, 2017
	Weight
	Average		Gross								Gross
	Remaining		Carry		Accumulated		Impairment		Net		Carry		Accumulated		Impairment		Net
	Useful Life		Amount		Amortization		Loss		Balance		Amount		Amortization		Loss		Balance
Amortizing Intangible Assets
Animation Copyright		1.3	$	301,495	$	(64,606)	$	—	$	236,889	$	—	$	—	$	—	$	—
Software and licenses		—		97,308		(93,251)		—		4,057		214,210		(199,626)		—		14,584
Patent and trademark (i)		—		—		—		—		—		92,965		(39,943)		(53,022)		—
Influencer network (ii)		9.7		1,980,000		(66,000)		—		1,914,000		—		—		—		—
Customer contract (ii)		2.7		500,000		(55,556)		—		444,444		—		—		—		—
Trade name (ii)		14.7		110,000		(2,444)		—		107,556		—		—		—		—
Technology platform (ii)		6.7		290,000		(13,808)		—		276,192		—		—		—		—
Total amortizing intangible assets			$	3,278,803	$	(295,665)	$	—	$	2,983,138	$	307,175	$	(239,569)	$	(53,022)	$	14,584
Indefinite lived intangible assets
Website name (iii)				159,504		—		(134,290)		25,214		134,290		—		—		134,290
Patent (i)				28,000		—		—		28,000		10,599		—		(10,599)		—
Total intangible assets			$	3,466,307	$	(295,665)	$	(134,290)	$	3,036,352	$	452,064	$	(239,569)	$	(63,621)	$	148,874

(i) During the second quarter of 2017, the Company determined that one of its subsidiaries in the US would not serve the core business or generate future cash flow. As no future cash flows will be generated from using the patents owned by this subsidiary, the Company estimated the fair value of those patents to be nil as of June 30, 2017. Fair value was determined using unobservable (Level 3) inputs. Impairment loss from patents of $63,621 was recognized in 2017 to write off the entire book value of the patents.

(ii) During the third quarter of 2018, the Company completed the acquisition of 65.65% share of Grapevine. See Note 6.

(iii) The Company wrote off the YOD website in the amount of approximately $134,000 in 2018 since we no longer used the website.

Amortization expense relating to purchased intangible assets was $212,429 and $87,096 for the years ended December 31, 2018, and 2017, respectively.

The following table outlines the expected amortization expense for the following years:

	Amortization to be
Years ending December 31,		recognized
2019	$	546,882
2020		520,921
2021		357,873
2022		246,762
2023 and thereafter		1,310,700
Total amortization to be recognized	$	2,983,138