7. Goodwill and In-process R&D

Goodwill of $2.2 million and in-process R&D of $5.9 million were recorded in connection with the acquisition of Pelican, as described in Note 4. The Company performs an annual impairment test at the reporting unit level. However, during the year ended December 31, 2019, the Company experienced a sustained decline in the quoted market price of the Company’s common stock and as a result the Company determined that as of September 30, 2019 it was more likely than not that the carrying value of these acquired intangibles exceeded their estimated fair value. Accordingly, the Company performed an interim impairment analysis as of that date using the income approach. This analysis required significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital. Pursuant to ASU 2017-04, the Company recorded a goodwill impairment charge for the excess of the reporting unit’s carrying value over its fair value. During the year ended December 31, 2019, goodwill with a total carrying value of $2.2 million was written down to $1.5 million and an impairment charge of $0.7 million was recorded. The Company determined that the fair value of the IPR&D was in excess of its carrying value as of December 31, 2019 and 2018 and therefore no impairment was recorded for the IPR&D.

The following table provides a rollforward of the Company’s goodwill as of December 31, 2018 and 2019:


	Goodwill
Goodwill from acquisition of Pelican	$	2,189,338
Balance at December 31, 2018		2,189,338
Goodwill impairment loss		(737,000)
Balance at December 31, 2019	$	1,452,338

The following table provides a rollforward of the Company’s in-process R&D as of December 31, 2018. There was no change in in-process R&D during 2019.


	In-process
	R&D
In-process R&D from acquisition of Pelican	$	5,866,000
Balance at December 31, 2018	$	5,866,000