SCWorx, Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Purchased Identifiable Intangible Assets

Goodwill and Purchased Identifiable Intangible Assets

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 5. Goodwill and Purchased Identifiable Intangible Assets

Impairment

During the three months ended March 31, 2018, the Company recorded a goodwill impairment charge of $2.6 million within the promotion segment. The impairment was identified as part of management’s review of impairment indicators. Accordingly, it was determined that the recoverable value of the reporting units was less than the carrying value and therefore, an impairment loss was recorded.

Goodwill

The change in the carrying amount of goodwill for the three months ended March 31, 2018 is as follows:

Balance as of December 31, 2017	$	5,963,537
Impairment goodwill		(2,629,225)
Balance as of March 31, 2018	$	3,334,312

Intangible Assets

The change in the carrying amount of intangible assets for the three months ended March 31, 2018 is as follows:

Balance as of December 31, 2017	$	2,887,094
Amortization		(162,072)
Balance as of March 31, 2018	$	2,725,022

Identified intangible assets consist of the following:

		March 31, 2018
Intangible assets	Useful Life	Gross Assets		Accumulated Amortization		Net
Venue relationships	7 years	$	2,410,000	$	(449,839)	$	1,960,161
Ticketing software	3 years		90,000		(45,000)		45,000
Trademark and brand	3 years		610,000		(258,889)		351,111
Fighter contracts	3 years		140,000		(17,500)		122,500
Promoter relationships	6 years		277,099		(44,599)		232,500
Sponsor relationships	4 years		20,000		(6,250)		13,750
Total intangible assets, gross		$	3,547,099	$	(822,077)	$	2,725,022

Amortization expense for the three months ended March 31, 2018 and 2017, was $162,072 and $517,376, respectively.

As of March 31, 2018, estimated amortization expense for the unamortized acquired intangible assets over the next five years and thereafter is as follows:

Remainder of 2018	$	486,214
2019		609,119
2020		441,897
2021		409,952
2022		397,036
Thereafter		380,804
	$	2,725,022

- 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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