Goodwill and Intangible Assets, Net

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill includes the cost of the acquired business in excess of the fair value of the tangible net assets recorded in connection with the acquisitions of SlimCut and TVN (see Note 7 – Acquisitions). Accounting Standards Codification 350, “Intangibles – Goodwill and Other” (“ASC 350”), requires the Company to assess goodwill for impairment annually or more frequently if a triggering event occurs. The Company operates as one operating and reporting segment and, therefore, the Company assesses goodwill for impairment annually as one singular reporting unit. The Company’s policy is to first perform a qualitative assessment to determine if that it was more likely than not that the reporting unit's carrying value is less than the fair value, indicating the potential for goodwill impairment. If the reporting unit fails the qualitative test then the Company proceeds with the quantitative two-step goodwill impairment calculation. During 2019, the Company performed a qualitative assessment of the reporting unit's fair value which included assessing the impact of certain factors such as general economic conditions, limitations on accessing capital, changes in forecasted operating results, and fluctuations in foreign exchange rates. Based on our qualitative assessment, we concluded that it was more likely than not that an impairment of goodwill did not exist, and as a result, the Company did not perform the two-step process.

The changes in the carrying amount of goodwill as of December 31, 2019 and 2018, were as follows:


	2019		2018
Beginning balance as of January 1,	$	9,478	$	6,320
Acquisition-related goodwill	—		3,424


Foreign exchange impact	(75)		(266)
Ending balance as of December 31,	$	9,403	$	9,478

The Company also reviews certain identifiable intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of intangible assets are measured by a comparison of the carrying amount of the asset or asset group, using an income approach, to future undiscounted net cash flows expected to be generated by the asset or asset group. If such assets are not recoverable, the impairment to be recognized, if any, is measured by the amount which the carrying amount of the assets exceeds the estimated fair value of the assets or asset group. As the Company operates as one business unit and the Company’s long-lived assets do not have identifiable cash flows that are independent of the other assets and liabilities of this business unit, the impairment testing on intangible assets is performed at the entity-level.

The Company did not identify any impairment of intangible assets at December 31, 2019 and 2018

Information regarding the Company’s acquisition-related intangible assets, net is as follows:


	December 31, 2019
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships⁽¹⁾	$	4,729	$	(1,877)	$	2,852
Patent Fixed Asset⁽³⁾	40		—		40
Technology⁽²⁾	954		(298)		656
	$	5,723	(2,175)		3,548


	December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships⁽¹⁾	$	4,797	$	(1,283)	$	3,514

Technology⁽²⁾	$	973	$	(108)	865
	$	5,770	$	(1,391)	$	4,379

(1) The decrease for the year ended December 31, 2019 was due to accumulated amortization for the year. The increase in gross carrying amount for customer relationships in December 31, 2018, was due to an increase of $2,900 relating to the acquisition of SlimCut, which was partially offset by a decrease of $291 from the foreign exchange impact for the same period. From the

same period accumulated amortization expense increased by $508, partially offset by foreign exchange impact over the same period of $106.

(2) The decrease for the year ended December 31, 2019 was due to accumulated amortization for the year. For the year ended December 31, 2018, the gross carrying amount for technology includes an increase of $1,000 due to the acquisition of SlimCut which was partially offset by foreign exchange decrease of $27. Accumulated amortization increased by $109 over the same period due to the acquisition of SlimCut, partially offset by foreign exchange impact.

(3) The Company's Patent Fixed Assets are not required to be amortized.

Amortization expense amounted to $790, $619 and $358 for the years ended December 31, 2019, 2018, and 2017 respectively. The estimated future amortization expense of customer relationships for the next five years are as follows:


2020	$	835
2021	658
2022	467
2023	360
2024 and thereafter	1,228

Total	$	3,548