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Goodwill and Intangible Assets, Net

12 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The goodwill of $112,435 arising from the fiscal year 2020 acquisition of Hedvig represents the estimated value of potential expansion with new customers, the opportunity to further develop sales relationships with new customers and intangible assets that do not qualify for separate recognition. None of the goodwill recorded is expected to be deductible for income tax purposes.

There were no additions, impairments or any other changes to the carrying amount of goodwill during the fiscal year ended March 31, 2021.

Goodwill balances are as follows:


Balance as of March 31, 2020	$	112,435
Additions/(Impairments)	—
Balance as of March 31, 2021	$	112,435

As noted below, during the second quarter of fiscal year 2021, we impaired our intangible assets, at which time we assessed the carrying value of goodwill. Based on our assessment, we concluded there was no impairment of goodwill. We also completed our annual impairment review as of January 1, 2021 and concluded there were no impairments to goodwill.

Intangible assets, net

Intangible assets subject to amortization as of March 31, 2021 are as follows:


	Gross Carrying Amount		Accumulated Amortization		Impairment Charge		Net Carrying Value
Developed technology	$	49,000	$	(9,800)	$	(39,200)	$	—
Customer relationships	3,000		(1,500)		(1,500)		—
Total intangible assets	$	52,000	$	(11,300)	$	(40,700)	$	—

Amortization expense from acquired intangible assets was $5,650 for both the fiscal years ended March 31, 2021 and 2020, respectively.

Our intangible assets (developed technology and customer relationships) were acquired in connection with the Hedvig, Inc. ("Hedvig") transaction. The most material of these assets was the developed technology. The value of this asset was attributable to forecasted incremental revenues directly attributable to this technology. While we have successfully integrated this technology into our existing HyperScale X technology, we have not met our forecasts for standalone sales of this acquired technology. During the second quarter of fiscal year 2021 we identified an indicator of impairment and concluded that the carrying values of the developed technology and customer relationships acquired in connection with the Hedvig transaction were not recoverable on an undiscounted basis. As a result, we remeasured the fair value of these assets and concluded their value was de minimis. We recorded a $40,700 impairment charge in the accompanying Consolidated Statements of Operations for the year ended March 31, 2021. These non-recurring fair value measurements were categorized as Level 3, as significant unobservable inputs were used in the valuation analysis. Key assumptions used in the valuation include forecasts of revenue and expenses over an extended period, the useful life of the asset, tax rates, and estimated costs of debt and equity capital to discount the projected cash flows. Certain of these assumptions involve significant judgment and are based on management’s estimate of current and forecasted market conditions.