Goodwill and Other Intangible Assets

The Company recorded goodwill of $8.9 million as of June 30, 2018, and December 31, 2017.

Intangible assets subject to amortization are amortized on a straight-line basis, with the estimated useful life for the wellness portal and customer relationships as 4 - 6 years and 8 years, respectively. Intangible assets are summarized in the table below:



	June 30, 2018						December 31, 2017
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Intangible Assets, net		Gross Carrying Amount		Accumulated Amortization		Intangible Assets, net
Portal	$	8,351	$	4,125	$	4,226	$	8,351	$	3,256	$	5,095
Customer relationships	5,497		1,325		4,172		5,497		981		4,516
Trade name/trademark	200		200		—		200		171		29
Non-compete agreements	10		10		—		10		6		4
Total	$	14,058	$	5,660	$	8,398	$	14,058	$	4,414	$	9,644

Amortization expense for the three-month periods ended June 30, 2018 and 2017, was $0.6 million and $0.5 million, respectively, and $1.2 million and $0.8 million for the six-month periods ended June 30, 2018 and 2017, respectively.

Impairment Considerations

The Company has both current period operating and cash flow losses along with a history of operating and cash flow losses as described in Note 2 - Liquidity and Going Concern Assessment. The process of an impairment test is to identify any potential impairment by comparing the carrying value of a reporting unit including goodwill and its fair value. In 2017, the Company utilized an undiscounted cash flow methodology based on the projections for the asset group from 2018 through 2025 to test for recoverability. For the period ended June 30, 2018, given the potential sale transaction described in Note 2, the Company reduced the undiscounted cash flows to reflect the potential disposal of the asset group during 2018. The carrying amount of an asset group is considered recoverable if the total undiscounted future cash flows from the asset group are greater than the carrying amount of the asset group. We evaluated only the future cash flows that are directly associated with and expected to arise as a direct result of the use of the asset group and its eventual disposition. These cash flow estimates excluded cash outflows for interest and were determined on a pre-tax basis. Based on our analysis it was determined that the undiscounted cash flows from the use and estimated proceeds from the disposition of the asset group were greater than the $1.8 million carrying amount and the asset group would therefore not be considered impaired.

During the fourth fiscal quarter of 2017, prior to our annual testing of goodwill, the Company adopted ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment", which requires entities to compare the fair value of a reporting unit with its carrying amount and recognize an impairment charge for any amount by which the carrying amount exceeds the reporting unit’s fair value, to the extent that the loss recognized does not exceed the amount of goodwill allocated to that reporting unit. As previously disclosed, the Company has a single reporting unit, inclusive of $8.9 million of goodwill. The Company used the equity premise in assigning assets and liabilities to a reporting unit to determine its carrying value, which resulted in a stockholders’ deficit balance of $6.9 million as of December 31, 2017. The fair value of the Company is based on its market capitalization using outstanding shares and the closing stock price as of December 31, 2017 and June 30, 2018, which resulted in positive fair value of over $11 million and $1 million, respectively. Therefore, the fair value of the reporting unit is greater than the carrying amount, and goodwill is not considered to be impaired at June 30, 2018.