Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2015

Goodwill And Intangible Assets Disclosure [Abstract]

Note 8 – Intangible Assets and Goodwill

Intangible assets

The details of all identifiable intangible assets as of December 31, 2015 and 2014, are shown below (in thousands except for lives):

Amortized Intangible Assets	Original Life (years)	Remaining Life (years)	Acquisition Cost		Accumulated Amortization			Impairment			Carrying Value December 31, 2015
Customer Network (HGP)	12	8.2	$	4,180	$	(1,253	)	$	(2,749	)	$	178
Trade Name (HGP)	14	10.2		1,460		(401	)		—			1,059
Customer Relationships (NLEX)	7.6	6.1		834		(174	)		—			660
Non-Compete Agreement (NLEX)	2	0.4		71		(56	)		—			15
Website (NLEX)	5	3.4		48		(15	)		—			33
Total				6,593		(1,899	)		(2,749	)		1,945

Unamortized Intangible Assets
Trade Name (NLEX)	N/A	N/A		2,437		—			—			2,437
Total			$	9,030	$	(1,899	)	$	(2,749	)	$	4,382


Amortized Intangible Assets	Original Life (years)	Remaining Life (years)	Acquisition Cost		Accumulated Amortization			Impairment			Carrying Value December 31 2014
Customer Network (HGP)	12	9.2	$	4,180	$	(987	)	$	—		$	3,193
Trade Name (HGP)	14	11.2		1,460		(295	)		—			1,165
Customer Relationships (NLEX)	7.6	7.1		834		(64	)		—			770
Non-Compete Agreement (NLEX)	2	1.4		71		(21	)		—			50
Website (NLEX)	5	4.4		48		(6	)		—			42
Total				6,593		(1,373	)		—			5,220

Unamortized Intangible Assets
Trade Name (NLEX)	N/A	N/A		2,437		—			—			2,437
Total			$	9,030	$	(1,373	)	$	—		$	7,657

Amortization expense during each of 2015 and 2014 was $0.5 million. No significant residual value is estimated for these intangible assets.

The Company performed its annual impairment test in the fourth quarter of 2015. The Company first performed a qualitative assessment of its intangible assets to determine if the two-step impairment test was required. The results of the qualitative analysis assessment of the HGP customer network and tradename indicated that, due to the sustained losses of HGP, the Company would be required to perform the two-step impairment test. The Company tested the recoverability of each asset using an undiscounted cash flow analysis. Based on the results of the test, the Company concluded that the carrying cost of the HGP tradename was recoverable, and therefore no further testing was warranted, however the carrying cost of the HGP customer network was not recoverable, and therefore the Company proceeded to step two of the impairment test. Under step two of the impairment test, the Company used a discounted cash flow analysis to determine the fair value of the customer network, which was then compared against the asset’s carrying cost to determine if an impairment charge is warranted. This step of the assessment indicated that the fair value of the customer network was less than its carrying value, and as a result, the Company recorded a non-cash impairment charge of $2.7 million in the fourth quarter of 2015, reducing the carrying amount of the HGP customer network to $0.2 million.

The estimated amortization expense during the next five fiscal years and thereafter is shown below:

Year	Amount
2016	$	260
2017		245
2018		245
2019		240
2020		236
Thereafter		719
Total	$	1,945

Goodwill

As part of its acquisitions, the Company recognized goodwill of $0.6 million related to Equity Partners in 2011, $4.7 million related to HGP in 2012, and $3.5 million related to NLEX in 2014.

A summary of the goodwill for 2015 and 2014 is shown below (in thousands):

Acquisition	December 31, 2014		Acquired		Disposed		Impairment			December 31, 2015
Equity Partners	$	573	$	—	$	—	$	—		$	573
HGP		4,728		—		—		(2,688	)		2,040
NLEX		3,545		—		—		—			3,545
Total goodwill	$	8,846	$	—	$	—	$	(2,688	)	$	6,158


Acquisition	December 31, 2013		Acquired		Disposed		Impairment			December 31, 2014
Equity Partners	$	573	$	—	$	—	$	—		$	573
HGP		4,728		—		—		—			4,728
NLEX		—		3,545		—		—			3,545
Total goodwill	$	5,301	$	3,545	$	—	$	—		$	8,846

In 2015 the Company changed the date of its annual impairment test from December 31 to October 1. The change allows the Company to perform the required testing on a more timely basis for its fiscal year-end close process. The Company does not believe that the change in the date has a material impact on the result of the 2015 annual impairment test.

The Company performed its annual impairment test in the fourth quarter of 2015. The Company first performed a qualitative assessment of its reporting units to determine if the two-step impairment test was required. The results of the qualitative assessment of the HGP reporting unit indicated that due to its sustained losses the Company would be required to perform the two-step impairment test. The Company performed the first step of the impairment test by comparing the fair value of the reporting unit to its carrying value. The Company determined the fair value of the reporting unit using a combination of valuation techniques, including multiples from comparable companies and discounted cash flows, due to the lack of quoted market prices for the reporting unit. The carrying value of the reporting unit exceeded its fair value, and the Company proceeded to step two of the impairment test. Under step two of the impairment test the Company performed a hypothetical purchase price allocation as if the reporting unit was being acquired in a business combination, and estimated the fair value of the identifiable assets and liabilities of the reporting unit. This determination required the Company to make estimates and assumptions regarding the fair value of its recorded assets and liabilities. This step of the assessment indicated that the implied fair value of the Company’s goodwill for HGP was $2.0 million. As a result, the Company recorded a non-cash impairment charge of $2.7 million in the fourth quarter of 2015, reducing the carrying amount of its HGP goodwill to $2.0 million.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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