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

6 Months Ended

Jun. 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 six months ended June 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 June 30, 2021 and December 31, 2020, respectively.

Intangible assets consisted of the following:

		June 30, 2021							December 31, 2020
	Amortization period (years)	Gross amount		Accumulated amortization			Net amount		Gross amount		Accumulated amortization			Net amount
Trademarks	4 – 10	$	2,820	$	(478	)	$	2,342	$	1,420	$	(373	)	$	1,047
Franchise agreements	7.5 – 10		45,400		(13,893	)		31,507		34,500		(11,498	)		23,002
Reacquired franchise rights	5 – 8		30		—			30		158		(15	)		143
Customer relationships	1		—		—			—		33		(26	)		7
Non-compete agreement	5		1,400		(1,142	)		258		1,400		(1,002	)		398
Web design and domain	3 – 10		130		(57	)		73		130		(44	)		86
Deferred video production costs	3		1,718		(639	)		1,079		1,150		(316	)		834
Total definite-lived intangible assets			51,498		(16,209	)		35,289		38,791		(13,274	)		25,517
Indefinite-lived intangible assets:
Trademarks	N/A		72,607		—			72,607		72,607		—			72,607
Total intangible assets		$	124,105	$	(16,209	)	$	107,896	$	111,398	$	(13,274	)	$	98,124

Amortization expense was $1,669 and $3,008, for the three and six months ended June 30, 2021, respectively, and $1,259 and $2,458 for the three and six months ended June 30, 2020, respectively.

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

Remainder of 2021	$	3,275
2022		6,192
2023		5,905
2024		5,670
2025		5,547
Thereafter		8,700
Total	$	35,289