9.	Goodwill and Intangible Assets

Goodwill

The Company reviews goodwill for impairment annually as of December 31 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company tests goodwill at the reporting unit level. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP. After the acquisition of Hyperspring on November 14, 2014, the Company determined that it had two reporting units, which are the same as our two operating segments: (i) Performance Improvement Solutions; and (ii) Nuclear Industry Training and Consulting (which includes Hyperspring and Absolute).

On February 15, 2019, we acquired DP Engineering (as depicted in Note 4) and preliminarily recorded goodwill and identified intangible assets as part of the acquisition. On February 23, 2019, an unexpected event occurred at one of DP Engineering's significant customers and all pending work for that customer was suspended pending a root cause analysis on February 28, 2019. While that analysis is now complete, and virtually all of the suspended projects have been restarted, the customer has indicated that DP Engineering will be suspended from obtaining new projects for up to six months from the date of original notice of suspension or approximately September 2019. While the Company and DP Engineering are working to rehabilitate the customer relationship, the Company determined that the notice of suspension was a triggering event necessitating an interim goodwill impairment test.

On May 10, 2019, the Company determined that a material impairment had occurred, requiring an interim assessment for impairment to be completed related to both $5.6 million of goodwill recorded and $6.8 million of definite-lived intangible assets in the acquisition.

The impairment test was based on income based approach with discounted cash flow method and market based approach with guideline public company method and merger and acquisition method.

The preliminary result of the interim impairment testing indicated that the current estimated fair value of goodwill recorded from the acquisition of DP Engineering had declined below its initial estimated fair value at the acquisition date. As a result, the Company recognized an impairment charge of $2.1 million to write down the goodwill on DP Engineering. The fair value of goodwill recognized from the acquisition of DP Engineering is still provisional and subject to further measurement period adjustment based upon the preliminary purchase price allocation. The Company determined that the impact of the suspension of obtaining new contracts from that customer resulted in a material downward revision to DP Engineering's revenue and profitability forecasts when compared to the acquisition date valuation. The impairment charge on goodwill was recorded within "Loss on impairment" in our consolidated statements of operations.

Changes in the net carrying amount of goodwill from December 31, 2018 through March 31, 2019 were due to the acquisition of DP Engineering, and were comprised of the following items:

(in thousands)

	Performance Improvement Solutions			Nuclear Industry Training and Consulting		Total
Balance, January 1, 2019	$	4,739		$	8,431	$	13,170
Acquisition		5,633			-		5,633
Dispositions		-			-		-
Goodwill impairment loss		(2,094	)		-		(2,094	)
Balance, March 31, 2019	$	8,278		$	8,431	$	16,709

Intangible Assets Subject to Amortization

Amortization of intangible assets other than goodwill is recognized on a straight-line basis over the estimated useful life of the intangible assets, except for customer relationships which are recognized in proportion to the related projected revenue streams. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. The Company does not have any intangible assets with indefinite useful lives, other than goodwill.

As discussed in Note 4, Acquisitions, we recognized definite-lived intangible assets of $6.8 million upon acquisition of DP Engineering on February 15, 2019, including customer contracts and relationships, trademarks and non-compete agreements, with amortization periods of five to fifteen years. Amortization of our definite-lived intangible assets is recognized on a straight-line basis over the estimate useful life of the associated assets.

As described above, following a February 23, 2019 event occurred at a customer location and subsequent receipt of a suspension notice on February 28, 2019, the Company has concluded that DP Engineering's relationship with a significant customer has been adversely impacted. The DP Engineering customer contracts and relationships were the major definite-lived intangible assets that were recognized upon the acquisition of DP Engineering. Accordingly, the Company determined that, in addition to the above describe testing of a potential impairment of goodwill, an interim definite-lived intangible asset impairment test was also necessary.

Therefore, the impairment test of the definite-lived intangible assets recognized upon the acquisition of DP Engineering was also conducted.

The interim impairment test was based on the present value of revised cash flow projected for five to fifteen years. The result of the impairment test indicated that the current estimated fair value of noted definite-lived intangible assets had declined below their initial estimated fair value. As a result, the Company recognized an impairment charge of $3.4 million. The fair value of definite-lived intangible assets recognized upon the acquisition of DP Engineering is still provisional and subject to further measurement period adjustment according to purchase price allocation. The impairment charge of $3.4 million on definite-lived intangible assets were recorded within "Loss on impairment" in our consolidated statements of operations.

Changes in the gross carrying amount, accumulated amortization, addition and impairment of definite-lived intangible assets from December 31, 2018 through March 31, 2019 was comprised of the following items:

(in thousands)

	For the Three Months Ended March 31, 2019
	Beginning Gross		Accumulated			Addition		Impairment			Net
	Carrying Amount		Amortization
Amortized intangible assets:
Customer relationships	$	6,831	$	(2,745	)	$	4,898	$	(3,370	)	$	5,614
Trade names		1,295		(405	)		1,172		-			2,062
Developed technology		471		(471	)							-
Non-contractual customer relationships		433		(433	)							-
Noncompete agreement		221		(61	)		728		-			888
Alliance agreement		527		(92	)							435
Others		167		(167	)							-
Total	$	9,945	$	(4,374	)	$	6,798	$	(3,370	)	$	8,999

(in thousands)	As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization			Net
Amortized intangible assets:
Customer relationships	$	6,831	$	(2,375	)	$	4,456
Trade names		1,295		(318	)		977
Developed technology		471		(471	)		-
Non-contractual customer relationships		433		(433	)		-
Noncompete agreement		221		(35	)		186
Alliance agreement		527		(66	)		461
Others		167		(167	)		-
Total	$	9,945	$	(3,865	)	$	6,080

Amortization expense related to definite-lived intangible assets totaled $0.5 million and $0.2 million for the three months ended March 31, 2019 and 2018, respectively. The following table shows the estimated amortization expense of the definite-lived intangible assets for the next five years:

(in thousands)
Years ended December 31:
2019 (remainder)	$	1,536
2020		1,973
2021		1,470
2022		1,152
2023		868
Thereafter		2,000
Total	$	8,999