Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Purchased Identifiable Intangible Assets

v3.10.0.1
Goodwill and Purchased Identifiable Intangible Assets
 9 Months Ended
Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block]
Note 5. Goodwill and Purchased Identifiable Intangible Assets
 
Goodwill
 
In May 2018, the Company ceased all professional MMA promotion operations and committed to an exit/disposal plan of the promotion businesses. In September 2018, the Company ceased all athlete management operations and extended its exit/disposal plan to SuckerPunch. In conjunction with the discontinued operations, $5,963,537 of Goodwill was classified as a component of long term assets - discontinued operations within the December 31, 2017, condensed consolidated balance sheet, which was subsequently impaired during the second quarter 2018. Refer to “
Note 3 Discontinued Operations
".
 
During the second quarter of 2018, the Company recorded a goodwill impairment charge related to the SuckerPunch acquisition of $1.5 million, which is included as a component of net loss from discontinued operations, net of tax for the nine months ended September 30, 2018.
 
Intangible Assets
 
During the second quarter of 2018, the Company recorded an intangible impairment charge of $231,037 related to the write down of the ticketing software and promoter relationships acquired intangible assets from the CageTix business acquisitions, which is included as a component of operating expenses for the nine months ended September 30, 2018.
 
During the second quarter of 2018, the Company recorded an intangible impairment charge of $182,546 related to the write down of the trademark and brand, fighter contracts, and sponsor relationships acquired intangible assets from the SuckerPunch business acquisitions, which is included as a component of net loss from discontinued operations, net of tax for the nine months ended September 30, 2018.
 
The change in the carrying amounts of intangible assets for the nine months ended September 30, 2018 is as follows:
 
Balance as of December 31, 2017
 
$
271,870
 
Amortization
 
 
40,833
 
Impairment – intangibles (CageTix)
 
 
231,037
 
Balance as of September 30, 2018
 
$
—
 
 
Identified intangible assets consist of the following:
 
 
 
 
 
September 30, 2018
 
 
December 31, 2017
 
Intangible assets
 
Useful Life
 
Gross

Assets
 
 
Accumulated

Amortization
 
 
Impairment
 
 
Net
 
 
Gross

Assets
 
 
Accumulated

Amortization
 
 
Net
 
Ticketing software
 
3
years
 
$
90,000
 
 
$
(52,500
)
 
$
(37,500
)
 
$
—
 
 
$
90,000
 
 
$
(37,500
)
 
$
52,500
 
Promoter relationships
 
6
years
 
 
277,099
 
 
 
(83,562
)
 
 
(193,537
)
 
 
—
 
 
 
277,099
 
 
 
(57,729
)
 
 
219,370
 
Total intangible assets, gross
 
 
 
$
367,099
 
 
$
(136,062
)
 
$
(231,037
)
 
$
—
 
 
$
367,099
 
 
$
(95,229
)
 
$
271,870
 
  
Amortization expense for the three months ended September 30, 2018 and 2017, was $0 and $19,046, respectively.
 
Amortization expense for the nine months ended September 30, 2018 and 2017, was $
40,833
and $57,137, respectively.
 
In May 2018, the Company ceased all professional MMA promotion operations and committed to an exit/disposal plan of the promotion business. In conjunction with the discontinued operations, $2,615,224 million of intangible assets, net, were classified as long term assets - discontinued operations within the December 31, 2017, condensed consolidated balance sheet, which were disposed of during the second quarter 2018.
 
As of September 30, 2018, the balance of intangible assets was $0.