12. Goodwill and Other Intangible Assets, Net

 

Goodwill

 

As of both December 31, 2025 and 2024, the Company’s carrying amount of goodwill was $2,319,000. As of December 31, 2025, $1,989,000 of the Company’s carrying amount of goodwill came from the Company’s acquisition of RISE and $330,000 came from the Company’s acquisition of GM. As of December 31, 2025 and 2024, management concluded that there have been no impairments to the carrying value of the Company’s goodwill and no impairment charges related to goodwill were recognized during the years ended December 31, 2025 and 2024. Refer to Note 2 – Summary of Significant Accounting Policies for further information.

 

Other Intangible Assets, Net

 

As a result of the Company’s acquisition of GM, the Company acquired intangible assets consisting of GM artist contracts, the fair value of which were $778,000 as of the acquisition date. Amortization commenced upon acquisition and is recognized over its estimated useful life of 4 years. Amortization expense for the intangible asset totaled $195,000 for the year ended December 31, 2025.

 

On April 30, 2025, the Company acquired certain assets from BMLG related to music masters, including associated copyrights and artwork. The acquisition was accounted for as an asset purchase, in accordance with ASC 805, Business Combinations, because substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset which is the recorded masters. The entire cost of $441,000 was allocated to the recorded masters intangible asset, which is amortized on a straight-line basis over an estimated useful life of 8.5 years, reflecting the contractual licensing periods with the artists. Amortization expense for this intangible asset was $35,000 for the year ended December 31, 2025.

 

As of December 31, 2025, the Company estimates the following future amortization of other intangible assets:

 

Year  Amount 
2026  $246,000 
2027   246,000 
2028   165,000 
2029   52,000 
2030 and after   199,000 
Total  $908,000 

Historical Timeline

Fiscal YearFiled
2025Mar 30, 2026Showing above
2024Mar 31, 2025
2021Mar 30, 2022
2020Mar 10, 2021
2019Mar 27, 2020
2015Mar 30, 2016

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.