Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

The Company’s amortizable intangible assets consisted of the following (in thousands):



	September 30, 2017
	Customer Relationships			Developed Technology			Trademarks / Trade-Names			Covenants Not to Compete			Total
Original cost	$	4,913		$	8,198		$	2,183		$	34		$	15,328
Accumulated amortization	(2,043		)	(5,675		)	(769		)	(34		)	(8,521		)
Net identifiable intangible assets	$	2,870		$	2,523		$	1,414		$	—		$	6,807
Weighted-average useful lives (years)	10			6			15			2			9



	December 31, 2016
	Customer Relationships			Developed Technology			Trademarks / Trade-Names			Covenants Not to Compete			Total
Original cost	$	4,759		$	7,917		$	2,178		$	31		$	14,885
Accumulated amortization	(1,577		)	(4,509		)	(658		)	(31		)	(6,775		)
Net identifiable intangible assets	$	3,182		$	3,408		$	1,520		$	—		$	8,110
Weighted-average useful lives (years)	10			6			15			2			9

Changes to the carrying amount of net amortizable intangible assets for the nine months ended September 30, 2017 consisted of the following (in thousands):



	Nine Months Ended September 30, 2017
Balance, beginning of period	$	8,110
Amortization expense	(1,568		)
Currency translation	265
Balance, end of period	$	6,807

Amortization expense of intangible assets consisted of the following (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Amortization expense associated with the developed technology included in cost of revenues	$	302	$	308	$	893	$	953
Amortization expense associated with other acquired intangible assets included in operating expenses	226		221		675		674
Total amortization expense	$	528	$	529	$	1,568	$	1,627

Goodwill

On October 3, 2014, the Company completed the acquisition of Kulu Valley, Ltd., subsequently renamed Qumu Ltd, and recognized $8.8 million of goodwill and $6.7 million of intangible assets. The goodwill balance of $7.3 million at September 30, 2017 reflects the impact of foreign currency exchange rate fluctuations since the acquisition date. The gross carrying amount of goodwill related to the 2011 acquisition of Qumu, Inc. of $22.2 million was fully impaired in 2012.

During the nine months ended September 30, 2017, the Company’s stock price traded at levels which caused the Company’s enterprise value, excluding any control premium, to approximate its book value, resulting in increased risk of a potential impairment of goodwill. As of September 30, 2017, the Company’s market capitalization, without a control premium, exceeded its book value by approximately 130% and the Company determined there were no other triggering events necessitating a goodwill impairment analysis. Declines in the Company’s market capitalization or a downturn in its future financial performance and/or future outlook could require the Company to record goodwill and other impairment charges. While a goodwill impairment charge is a non-cash charge, it would have a negative impact on the Company's results of operations.

- 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.

+ References + Details