Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 4 — GOODWILL AND INTANGIBLE ASSETS

On April 12, 2018, the Company acquired Car360, Inc. ("Car360"), a provider of app-based photo capture technology, for approximately $16.7 million, net of cash acquired of approximately $0.4 million. The purchase price was comprised of approximately $6.7 million cash, net of cash acquired, and approximately 0.5 million Class A Units of Carvana Group, with a fair value of approximately $10.0 million.

The purchase price was allocated to net tangible assets of approximately $0.2 million and intangible assets of approximately $9.9 million based on their fair values on the acquisition date and a related deferred tax liability of approximately $2.5 million. The deferred tax liability will amortize over two to seven years, and approximately $0.4 million and $0.3 million was amortized during the years ended December 31, 2019 and 2018, respectively. The excess of the purchase price over the amounts allocated to assets acquired, liabilities assumed and the deferred tax liability was approximately $9.4 million, which has been recorded as goodwill. The historical results of operations for Car360 were not significant to the Company's consolidated results of operations for the periods presented.

The following table summarizes intangible assets and goodwill related to the Car360 acquisition as of December 31, 2019 and 2018 (in thousands):


		December 31,
	Useful Life	2019		2018
Intangible assets:
Developed technology	7 years	$	8,642	$	8,642
Customer relationships	2 years	523		523
Non-compete agreements	5 years	774		774
Intangible assets, acquired cost		9,939		9,939
Less: accumulated amortization		(2,707)		(1,070)
Intangible assets, net		$	7,232	$	8,869

Goodwill	N/A	$	9,353	$	9,353

Amortization expense was $1.6 million and $1.1 million during the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, the remaining weighted-average amortization period for definite-lived intangible assets was approximately 4.9 years. The anticipated annual amortization expense to be recognized in future years as of December 31, 2019 is as follows (in thousands):


	Expected Future Amortization
2020	$	1,590
2021	1,389
2022	1,389
2023	1,279
2024	1,235
Thereafter	350
Total	$	7,232