7. Intangible Assets

Intangible assets are summarized as follows:


		Gross
	Useful Lives	Carrying		Accumulated		Net Carrying
September 30, 2019	(Years)	Amount		Amortization		Amount
		(in thousands)
Finite-lived intangible assets:
Trademarks	5 - 15	$	12,480	$	(4,056)	$	8,424
Customer agreements	4		2,200		(2,196)		4
Patents	10		95		(62)		33
		$	14,775	$	(6,314)		8,461
Indefinite-lived intangible assets:
Trademarks							591,933
Intangible assets, net						$	600,394


		Gross
	Useful Lives	Carrying		Accumulated		Net Carrying
December 31, 2018	(Years)	Amount		Amortization		Amount
		(in thousands)
Finite-lived intangible assets:
Trademarks	5 - 15	$	12,438	$	(2,689)	$	9,749
Customer agreements	4		2,200		(2,147)		53
Patents	10		361		(321)		40
		$	14,999	$	(5,157)		9,842
Indefinite-lived intangible assets:
Trademarks							624,985
Intangible assets, net						$	634,827

Estimated future annual amortization expense for intangible assets in service as of September 30, 2019 is summarized as follows:


Years Ended December 31,	(in thousands)
Remainder of 2019	$	462
2020		1,838
2021		1,835
2022		1,812
2023		1,387
Thereafter		1,127
	$	8,461

Amortization expense from continuing operations was approximately $0.5 million and $0.2 million for the three months ended September 30, 2019 and 2018, respectively. Amortization expense from continuing operations was approximately $1.4 million and $0.5 million for the nine months ended September 30, 2019 and 2018, respectively.

Finite-lived intangible assets represent trademarks, customer agreements and patents related to the Company’s brands. Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful lives of the assets. The carrying value of finite-lived intangible assets and other long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Indefinite-lived intangible assets are not amortized, but instead are subject to impairment evaluation. As of September 30, 2019, the trademarks of Jessica Simpson, Avia, AND1, Joe’s, GAIAM, Caribbean Joe, and Ellen Tracy have been determined to have indefinite useful lives, and accordingly, consistent with ASC Topic 350, no amortization has been recorded in the Company’s unaudited condensed consolidated statements of operations. Instead, each of these intangible assets are tested for impairment annually and as needed on an individual basis as separate single units of accounting, with any related impairment charge recorded to the statement of operations at the time of determining such impairment. The annual evaluation of the Company’s indefinite-lived trademarks is performed as of October 1, the beginning of the Company’s fourth fiscal quarter.

In June 2019, the Company completed the sale of MSLO. As a result, indefinite-lived intangible assets decreased by $330.1 million which was recorded within assets classified as held for disposition from discontinued operations as of December 31, 2018. During the first quarter of 2019, the Company recorded non-cash impairment charges of $161.2 million for indefinite-lived intangible assets related to the Martha Stewart and Emeril Lagasse trademarks reflected in discontinued operations on the unaudited condensed consolidated statements of operations. The impairments arose during the sale process for the Martha Stewart and Emeril Lagasse brands (as discussed in Note 3) due to the difference in the fair value as indicated by the sales price as compared to the carrying values of the intangible assets included in the transaction. The sale of the Martha Stewart and Emeril Lagasse brands was approved by the Board of Directors during the second quarter of 2019, to allow the Company to achieve one of its top priorities in significantly reducing its debt. Going forward the Company’s strategy is to focus on higher margin brands that are well suited for growing health, wellness and beauty categories.

During the three months ended September 30, 2019, the Company recorded non-cash impairment charges of $33.1 million consisting of $28.5 million related to the Jessica Simpson trademark and $4.6 million related to the Joe’s trademark. During the three months ended September 30, 2018, the Company recorded non-cash impairment charges of $17.9 million for indefinite-lived intangible assets related to the trademarks of two of the Company’s non-core brands: Ellen Tracy and Caribbean Joe. The impairments arose due to reduced growth expectations and the impact of licensee transitions for these brands. Fair value for each trademark was determined based on the income approach using estimates of future discounted cash flows. These charges are included in impairment charges in the unaudited condensed consolidated statements of operations.

During the nine months ended September 30, 2018, the Company sold both the Revo and FUL trademarks. During the nine months ended September 30, 2018, the Company incurred a loss on the sale of the assets of $7.1 million.