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Note 6 - Goodwill and Other Intangible Assets | 9 Months Ended
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Sep. 30, 2020
Notes to Financial Statements |
Goodwill and Intangible Assets Disclosure [Text Block] | 6. Goodwill and Other Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed in our acquisitions. The Company's Goodwill balance is $116.3 million as of September 30, 2020 and $109.8 million as of December 31, 2019. The Company's goodwill relates 93% ( $107.7 million) to its Domain Services operating segment and 7% ( $8.6 million) to its Network Access Services operating segment. Goodwill is not amortized, but is subject to an annual impairment test, or more frequently if impairment indicators are present. No impairment was recognized during the three and nine months ended September 30, 2020 and 2019. Other Intangible Assets: Intangible assets consist of acquired brand, technology, customer relationships, surname domain names, direct navigation domain names and network rights. The Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company has the exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. The indefinite life intangible assets are not amortized but are subject to impairment assessments performed throughout the year. As part of the normal renewal evaluation process during the periods ended September 30, 2020 and September 30, 2019, the Company assessed that certain domain names that were originally acquired in the June 2006 acquisition of Mailbank.com Inc. that were up for renewal, should not be renewed. Intangible assets, comprising brand, technology, customer relationships and network rights are being amortized on a straight-line basis over periods of two to fifteen years. In June 2020, in light of developments in the economy and the business and leisure travel industries as a result of the novel strain of coronavirus (“COVID-19”) pandemic, the Company decided to discontinue the operation of Roam Mobility. As a consequence of the decision to shut down its Roam Mobility operations, the Company has recorded an impairment loss associated with Roam Mobility customer relationships of nil and $1.4 million during the three months ended September 30, 2020 and the nine months ended September, 30 2020, respectively. In June 2020, the Company committed to a plan to sell all of its Ting Mobile customer base (other than certain customer accounts associated with one network operator) and reclassified its mobile customer relationships totaling $2.6 million as held-for-sale assets. In August 2020, the Company sold the mobile customer accounts that are marketed and sold under the Ting brand (other than certain customer accounts associated with one network operator), and as such de-recognized any capitalized customer relationships associated with those accounts. See Note 17 - Other income, for more information. Throughout the second quarter of 2020, the Company purchased several non-exclusive land easements, totaling $0.1 million, which are necessary for the Company to install fiber internet infrastructure in conjunction with its Fiber Internet business. Net book value of acquired intangible assets consist of the following (Dollar amounts in thousands of U.S. dollars):
|  | Surname domain names |  |  | Direct navigation domain names |  |  | Brand |  |  | Customer relationships |  |  | Technology |  |  | Network rights |  |  | Total |
Amortization period |  | indefinite life |  |  | indefinite life |  |  | 7 years |  |  | 3 - 7 years |  |  | 2 - 7 years |  |  | 15 years |  |  |  |  |
Balances, June 30, 2020 |  | $ | 11,160 |  |  | $ | 1,135 |  |  | $ | 8,056 |  |  | $ | 30,257 |  |  | $ | 884 |  |  | $ | 1,240 |  |  | $ | 52,732 |
Amortization expense |  |  | - |  |  |  | - |  |  |  | (518 | ) |  |  | (1,797 | ) |  |  | (305 | ) |  |  | (25 | ) |  |  | (2,645 | )
Balances, September 30, 2020 |  | $ | 11,160 |  |  | $ | 1,135 |  |  | $ | 7,538 |  |  | $ | 28,460 |  |  | $ | 579 |  |  | $ | 1,215 |  |  | $ | 50,087 |
|  | Surname domain names |  |  | Direct navigation domain names |  |  | Brand |  |  | Customer relationships |  |  | Technology |  |  | Network rights |  |  | Total |
Amortization period |  | indefinite life |  |  | indefinite life |  |  | 7 years |  |  | 3 - 7 years |  |  | 2 - 7 years |  |  | 15 years |  |  |  |  |
Balances, December 31, 2019 |  | $ | 11,166 |  |  | $ | 1,144 |  |  | $ | 9,091 |  |  | $ | 34,268 |  |  | $ | 1,516 |  |  | $ | 469 |  |  | $ | 57,654 |
Cedar Networks acquisition (Note 4 (b)) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,640 |  |  |  | - |  |  |  | 750 |  |  |  | 5,390 |
Additions to/(disposals from) domain portfolio, net |  |  | (6 | ) |  |  | (9 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (15 | )
Impairment of definite life intangible asset |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,431 | ) |  |  | - |  |  |  | - |  |  |  | (1,431 | )
Other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (223 | ) |  |  | - |  |  |  | - |  |  |  | (223 | )
Write-down of Ting Mobile customer relationships |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (2,581 | ) |  |  | - |  |  |  | - |  |  |  | (2,581 | )
Acquisition of Network rights |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 69 |  |  |  | 69 |
Amortization expense |  |  | - |  |  |  | - |  |  |  | (1,553 | ) |  |  | (6,213 | ) |  |  | (937 | ) |  |  | (73 | ) |  |  | (8,776 | )
Balances, September 30, 2020 |  | $ | 11,160 |  |  | $ | 1,135 |  |  | $ | 7,538 |  |  | $ | 28,460 |  |  | $ | 579 |  |  | $ | 1,215 |  |  | $ | 50,087 |
The following table shows the estimated amortization expense for each of the next 5 years, assuming no further additions to acquired intangible assets are made (Dollar amounts in thousands of U.S. dollars):
|  | Year ending |
|  | December 31, |
Remainder of 2020 |  | $ | 2,294 |
2021 |  |  | 10,521 |
2022 |  |  | 10,499 |
2023 |  |  | 8,811 |
2024 |  |  | 2,399 |
Thereafter |  |  | 3,268 |
Total |  | $ | 37,792 |

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