Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 6 – Goodwill and Other Intangible Assets

Our definite-lived intangible assets as of June 30, 2016 and December 31, 2015 are as follows:

	Successor		Predecessor
	June 30,		December 31,
	2016		2015

Trademarks	$	917,000	$	1,047,000
Technology		6,576,000		2,355,000
Customer and clinician relationships		904,000		708,000
		8,397,000		4,110,000
Less accumulated amortization		(130,559)		(1,596,606)
	$	8,266,441	$	2,513,394

Goodwill

Predecessor Company

Goodwill represents the purchase price of acquisitions in excess of the amounts assigned to acquired tangible or intangible assets and assumed liabilities. As a result of our acquisition of Aldagen in February 2012, we recorded goodwill of approximately $0.4 million Prior to the acquisition of Aldagen, we had goodwill of approximately $0.7 million as a result of the acquisition of the Angel business in April 2010. We determined that goodwill was impaired as of September 30, 2015 and recognized a noncash goodwill impairment charge of approximately $1.1 million to fully write down the goodwill to its estimated fair value of zero as of September 30, 2015.

Successor Company (see Note 2 – Fresh Start Accounting)

Goodwill represents the excess of reorganization value over the fair value of tangible and identifiable intangible assets and the fair value of liabilities as of the Effective Date.

Changes in goodwill for the periods presented follows:

	Successor		Predecessor
Balance, at December 31, 2014	$	-	$	1,128,517

2015 impairment		-		(1,128,517)

Balance, at December 31, 2015		-	$	-

Fresh start accounting		2,079,284

Balance, at June 30, 2016	$	2,079,284

Definite-lived intangible assets – trademarks, customer and clinician relationships and technology

The Predecessor Company’s definite-lived intangible assets include Angel related trademarks, technology (including patents) and customer relationships, and were being amortized over their useful lives ranging from eight to twenty years. The Successor Company’s Aurix related definite-lived intangible assets include trademarks, technology (including patents) and clinician relationships, and are being amortized over their useful lives ranging from nine to fifteen years.

Amortization expense associated with our Angel related definite-lived intangible assets was approximately $90 thousand and $20 thousand for the periods from January 1, 2016 through May 4, 2016 and April 1, 2016 through May 4, 2016, respectively. Remaining Angel related definite lived intangible assets were eliminated as of May 4, 2016 as the underlying Angel assets were assigned to Deerfield pursuant to the Plan of Reorganization.

Amortization expense associated with our Aurix related definite-lived intangible assets was approximately $0.1 million for the period from May 5, 2016 through June 30, 2016.

Annual amortization expense based on our existing intangible assets and their estimated useful lives is expected to be approximately:

2016 (May 5, 2016 – December 31, 2016)	$	557,000
2017		852,000
2018		852,000
2019		852,000
2020		852,000
2021		852,000
Thereafter		3,580,000

- 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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