XML 28 R15.htm IDEA: XBRL DOCUMENT
v3.21.1

Intangible Assets | 12 Months Ended
--- | ---
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract] |
Intangible Assets | 9. Intangible Assets The following table provides the components of intangible assets:
|  |  |  |  | As of December 31, 2020 |  |  | As of December 31, 2019 |
(in thousands, |  | Useful life |  |  | Gross |  |  | Accumulated |  |  | Net Carrying |  |  | Gross |  |  | Accumulated |  |  | Net Carrying |
except useful life) |  | (years) |  |  | Cost |  |  | Amortization |  |  | Value |  |  | Cost |  |  | Amortization |  |  | Value |
Indefinite-lived non-amortizing: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
License agreement |  |  |  |  |  | $ | 8,456 |  |  | $ | — |  |  | $ | 8,456 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Trademarks |  |  |  |  |  |  | 30 |  |  |  | — |  |  |  | 30 |  |  |  | 67 |  |  |  | (67 | ) |  |  | — |
Definite-lived amortizing: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Patents |  |  | 14-18 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 564 |  |  |  | (564 | ) |  |  | — |
Internet domain |  |  | 15 |  |  |  | 900 |  |  |  | (190 | ) |  |  | 710 |  |  |  | 900 |  |  |  | (130 | ) |  |  | 770 |
License agreement |  |  | 1 |  |  |  | 2,220 |  |  |  | (2,220 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Internal-use software |  |  | 3 |  |  |  | 921 |  |  |  | (172 | ) |  |  | 749 |  |  |  | 366 |  |  |  | (35 | ) |  |  | 331 |
Intangible assets, net |  |  |  |  |  | $ | 12,527 |  |  | $ | (2,582 | ) |  | $ | 9,945 |  |  | $ | 1,897 |  |  | $ | (796 | ) |  | $ | 1,101 |
Prior to the Business Combination discussed in Note 4, Purple LLC entered into an agreement pursuant to which EdiZONE transferred tangible and intellectual property to Purple LLC that was then licensed back to EdiZONE to enable them to continue to meet certain preexisting license obligations it had with various third parties. On August 14, 2020, Purple LLC entered into a separate agreement whereby EdiZONE, for consideration of $8.5 million, assigned a license agreement with Advanced Comfort Technologies, Inc. dba Intellibed (“ACTI”), and related royalties payable thereunder, to Purple LLC, along with the trademarks GEL MATRIX and INTELLIPILLOW. The payment made to EdiZONE was recorded in the Company’s consolidated balance sheet at December 31, 2020 as an indefinite-lived non-amortizing license because the agreement with ACTI is perpetual. On January 13, 2020, Purple LLC entered into a supply and services agreement with a third party whereby the Company acquired a license and made a prepayment for future products and services to be provided by the third party. The $4.0 million paid upon execution of the contract was allocated to a license for certain technologies ($2.2 million), inventory to be utilized by the third party in the production of goods ($0.8 million) and future professional services to be delivered by the third party ($1.0 million). On October 13, 2020, Purple LLC filed suit against the third party for alleged violations under the contract. In response, the third party filed a counter lawsuit against Purple LLC. These lawsuits effectively ended any future performance under the contract. As a result, during the third quarter of fiscal 2020, the Company recorded in its consolidated statement of operations an impairment charge of $0.6 million for unamortized license costs. The Company also recorded write-offs of $0.8 million, and $0.3 million for prepaid professional services and prepaid inventory, respectively. Refer to Note 14 —Commitments and Contingencies —Legal Proceedings for additional information. Amortization expense for intangible assets was $2.4 million and $0.7 million for the years ended December 31, 2020 and 2019, respectively. There were no impairment charges related to intangible assets in 2019. Estimated amortization expense for definite-lived intangible assets is expected to be as follows for the next five years:
(in thousands) |  |  |
Year ended December 31, |  |  |
2021 |  | $ | 359 |
2022 |  |  | 325 |
2023 |  |  | 245 |
2024 |  |  | 60 |
2025 |  |  | 60 |
Thereafter |  |  | 410 |
Total future amortization for definite-lived intangible assets |  | $ | 1,459 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for all or part of the information related to intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_IntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration