Xponential Fitness, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Note 7 – Goodwill and Intangible Assets

Goodwill represents the excess of cost over the fair value of identifiable net assets acquired related to the original purchase of the various franchise businesses and acquisition of company-owned studios. Goodwill is not amortized but is tested annually for impairment or more frequently if indicators of potential impairment exist. During the nine months ended September 30, 2021, there was an increase of $8,183 in previously reported goodwill due to the acquisition of Rumble as discussed in Note 3. Goodwill totaled $147,863 and $139,680 at September 30, 2021 and December 31, 2020, respectively.

Intangible assets consisted of the following:


		September 30, 2021							December 31, 2020
	Amortization period (years)	Gross amount		Accumulated amortization			Net amount		Gross amount		Accumulated amortization			Net amount
Trademarks	10	$	2,820	$	(549	)	$	2,271	$	1,420	$	(373	)	$	1,047
Franchise agreements	7.5 – 10		45,400		(15,224	)		30,176		34,500		(11,498	)		23,002
Reacquired franchise rights	5 – 8		—		—			—		158		(15	)		143
Customer relationships	1		—		—			—		33		(26	)		7
Non-compete agreement	5		1,400		(1,212	)		188		1,400		(1,002	)		398
Web design and domain	3 – 10		130		(61	)		69		130		(44	)		86
Deferred video production costs	3		2,018		(827	)		1,191		1,150		(316	)		834
Total definite-lived intangible assets			51,768		(17,873	)		33,895		38,791		(13,274	)		25,517
Indefinite-lived intangible assets:
Trademarks	N/A		72,607		—			72,607		72,607		—			72,607
Total intangible assets		$	124,375	$	(17,873	)	$	106,502	$	111,398	$	(13,274	)	$	98,124

Amortization expense was $1,671 and $4,679, for the three and nine months ended September 30, 2021, respectively, and $1,294 and $3,753 for the three and nine months ended September 30, 2020, respectively.

The anticipated future amortization expense of intangible assets is as follows:


Remainder of 2021	$	1,670
2022		6,305
2023		5,972
2024		5,711
2025		5,541
Thereafter		8,696
Total	$	33,895