Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The Company's management performs its goodwill and other indefinite-lived intangible impairment tests annually or when changes in circumstances indicate an impairment event may have occurred by estimating the fair value of each reporting unit compared to its carrying value. The last annual impairment test took place as of November 30, 2015. The valuation of goodwill is further explained in Note (2), Summary of Significant Accounting Policies.

The Company is aggregated into four operating segments presented herein based on similar economic characteristics, nature of products and services, nature of production processes, type of customers and distribution methods. Our four operating segments consist of: 1) gourmet food, 2) home décor, 3) nutritional and wellness and 4) other. Note (17), Segment Information, provides ancillary financial information on the operating segments.

The Company recorded goodwill impairment charges of approximately $191,000 and $192,000 during the nine months ended September 30, 2016 and 2015. The goodwill impairment charges of $191,000 during the first quarter of 2016 and $192,000 during the second quarter of 2015 were related to the goodwill impairment of Tomboy Tools.

The following table provides the components of and changes in the carrying amount of Goodwill as of September 30, 2016 and December 31, 2015 (in thousands):



	Acquired Goodwill		Accumulated Impairment			Other			Net Carrying Amount
Balance December 31, 2014	$	7,073	$	(2,978	)	$	—		$	4,095
Additions ^(a)	1,655								1,655
Impairment^(b)			(192		)				(192		)
Other^(c)						(131		)	(131		)
Balance December 31, 2015	$	8,728	$	(3,170	)	$	(131	)	$	5,427
Additions	—								—
Impairment^(b)			(191		)				(191		)
Other^(c)						(160		)	(160		)
Balance September 30, 2016	$	8,728	$	(3,361	)	$	(291	)	$	5,076
^(a) Related to the acquisition of Betterware in 2015.
^(b) Related to the impairment of Tomboy Tools in 2015 and 2016.
^(c) Primarily reflects the impact of foreign exchange.

Identifiable Intangible Assets

The following tables provide the components of identifiable intangible assets as of September 30, 2016 and December 31, 2015 (in thousands, except amortization period):



Identifiable Intangible Assets	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount as of September 30, 2016		Weighted Average Amortization Period (in Years)
Indefinite-lived intangible assets:
Trade name and trademarks	$	5,317	$	—		$	5,317	—
Finite-lived intangible assets:
Trade name and trademarks	3		(3		)	—		—
Intellectual property	3,135		(815		)	2,320		3
	$	8,455	$	(818	)	$	7,637	3



	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount as of December 31, 2015		Weighted Average Amortization Period (in Years)
Indefinite-lived intangible assets:
Trade name and trademarks	$	5,614	$	—		$	5,614	—
Finite-lived intangible assets:
Trade name and trademarks	3		(3		)	—		—
Intellectual property	3,534		(347		)	3,187		4
	$	9,151	$	(350	)	$	8,801	4

Amortization

Amortization expense related to intangible assets is included in depreciation and amortization in the accompanying condensed consolidated statements of operations. During the three and nine months ended September 30, 2016, the Company recorded amortization expenses of $169,000 and $539,000, respectively. Amortization expenses of $52,000 and $155,000 were recorded during the three and nine months ended September 30, 2015.

As of September 30, 2016, the estimated future amortization expense associated with our intangible assets for each of the five succeeding years ending December 31, is as follows (in thousands):



2016 (remaining portion)	$	168
2017	670
2018	670
2019	603
2020	94
Thereafter	115
Total amortization of intangible assets	$	2,320

Potential Impairment

The Company may need to impair the goodwill and intangible assets if the Company continues to experience a downturn in revenue and continued losses. Agel's goodwill and indefinite intangible assets are at risk of impairment if the Company's profitability does not improve.

- 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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