Note 7 - Goodwill

As of December 31, 2019 and 2018, goodwill was $7,907,000 and $2,795,000, respectively. As of December 31, 2019, goodwill was comprised of (i) $7,366,000 recorded in connection with the October 1, 2019 acquisition of Oblong Industries and (ii) $541,000 related to the Glowpoint reporting unit as discussed below.

We test goodwill for impairment on an annual basis on September 30 of each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. Prior to the acquisition of Oblong Industries on October 1, 2019, Glowpoint operated as a single reporting unit and used its market capitalization to determine the fair value of the reporting unit as of each test date. In order to determine the market capitalization, the Company used the trailing 20-day volume weighted average price (“VWAP”) of its stock as of each period end. Following the acquisition of Oblong Industries, the Company operated two reporting units, Glowpoint and Oblong Industries. As of each June 30, 2019 and December 31, 2019, we considered the declines in Glowpoint revenue and/or stock price to be triggering events for interim goodwill impairment tests. For the Glowpoint goodwill impairment test as of December 31, 2019, to determine the fair value of the reporting unit, we used an average of the discounted cash flow method and a market-based method (multiples of revenue for comparable companies).

For the Glowpoint reporting unit, we recorded goodwill impairment charges of $2,254,000 and $4,955,000 in the years ended December 31, 2019 and 2018, respectively, as the carrying amount of the reporting unit exceeded its fair value on the applicable test dates. These charges are recognized as “Impairment Charges” on our Consolidated Statements of Operations. The activity in goodwill during the years ended December 31, 2019 and 2018 is shown in the following table ($ in thousands):



Goodwill	Glowpoint			Oblong Industries		Total
Balance 1/1/2018	$	7,750		$	—	$	7,750
Impairment	(4,955		)	—		(4,955		)
Balance 12/31/2018	2,795			—		2,795
Impairment	(2,254		)	—		(2,254		)
Acquisition	—			7,366		7,366
Balance 12/31/2019	$	541		$	7,366	$	7,907

In the event we experience future declines in our revenue, cash flows and/or stock price, this may give rise to a triggering event that may require the Company to record additional impairment charges on goodwill in the future.