Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

During 2016 and 2015, we evaluated our intangible assets and goodwill for impairment at the reporting unit level. We elected to omit the qualitative assessment of impairment factors and proceed directly to impairment testing with the assistance of a third-party valuation firm. No indication of impairment was noted.

The following is a schedule of intangible assets and goodwill from continuing operations as of December 31, 2016:



	Term	Carrying Value		Accumulated Amortization			Net Carrying Value		2016 Amortization

Customer list, Google	20 years	$	8,820,000	$	(2,131,500	)	$	6,688,500	$	441,000
Customer list, all other	10 years	1,610,000		(778,186		)	831,814		161,004
Exclusivity agreement	1 year	120,000		(120,000		)	—		—
Trade names, ALOT (1)	5 years	960,000		(928,000		)	32,000		192,000
Domain websites (2)	5 years	669,507		(267,945		)	401,562		136,704
Trade names, web properties (1)	-	390,000		—			390,000		—
Intangible assets classified as long-term		$	12,569,507	$	(4,225,631	)	$	8,343,876	$	930,708

Goodwill, Partner Network		$	1,776,544	$	—		$	1,776,544	$	—
Goodwill, Owned and Operated Network		3,984,264		—			3,984,264		—
Goodwill, total		$	5,760,808	$	—		$	5,760,808	$	—

The following is a schedule of intangible assets and goodwill from continuing operations as of December 31, 2015:



	Term	Carrying Value		Accumulated Amortization			Net Carrying Value		2015 Amortization
Names database	9 months	$	17,417,397	$	(17,417,397	)	$	—	$	—
Bundled downloads	4.5 months	2,447,075		(2,447,075		)	—		—
Intangible assets classified as current		19,864,472		(19,864,472		)	—		—

Customer list, Google	20 years	$	8,820,000	$	(1,690,500	)	$	7,129,500	$	441,000
Customer list, all other	10 years	1,610,000		(617,182		)	992,818		161,004
Exclusivity agreement	1 year	120,000		(120,000		)	—		—
Trade names, ALOT (1)	5 years	960,000		(736,000		)	224,000		192,000
Domain websites (2)	5 years	715,874		(131,241		)	584,633		131,241
Tradenames, web properties (1)	-	390,000		—			390,000		—
Intangible assets classified as long-term		$	12,615,874	$	(3,294,923	)	$	9,320,951	$	925,245

Goodwill, Partner Network		$	1,776,544	$	—		$	1,776,544	$	—
Goodwill, Owned and Operated Network		3,984,264		—			3,984,264		—
Goodwill, total		$	5,760,808	$	—		$	5,760,808	$	—

___________


(1)	We have determined ALOT trade name should be amortized over five years and the trade names related to our web properties have an indefinite life and as such are not amortized.

(2)

On May 8, 2015, we purchased two domain websites with a fair value of $715,874. We determined they should be amortized over 5 years (see Note 8). On May 8, 2016, the carrying value was adjusted by approximately $46,000 to reflect the lower price paid as compared to the contingent liability recorded as a result of the change in the price of Inuvo stock from the date of acquisition to the first contingent release of shares.

Our amortization expense over the next five years and thereafter is as follows:



2017	$	764,240
2018	732,240
2019	732,240
2020	612,858
2021	602,004
Thereafter	$	4,510,294
Total	$	7,953,876

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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