Digital Turbine, Inc. Quarterly report pursuant to sections 13 or 15(d)

Quarterly report pursuant to sections 13 or 15(d)

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

3 Months Ended

Jun. 30, 2011

Goodwill

The following is a reconciliation of the changes to the Company's carrying amount of goodwill for the period ended June 30, 2011:

Balance at March 31, 2011 and June 30, 2011

6,609

We complete our annual impairment tests in the fourth quarter of each year unless events or circumstances indicate that an asset may be impaired. There were no indications of impairment present during the period ended June 30, 2011. Fair value is defined under ASC 820, Fair Value Measurements and Disclosures as, “The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”. The Company considered a number of valuation approaches and methods and applied the most appropriate methods from the income, and market approaches to derive an opinion of value. Under the income approach, the Company utilized the discounted cash flow method, and under the market approach, consideration was given to the guideline public company method, the merger and acquisition method, and the market capitalization method.

Other Intangible Assets

The following is a reconciliation of the changes to the Company's carrying amount of intangible assets for the period ended June 30, 2011 and the year ended March 31, 2011:

	Amortizable			Unamortizable		Total
	Intangible Assets			Intangible Assets		Intangible Assets

Balance at March 31, 2011	$	893		$	2,473	$	3,366
Amortization		(58	)		-		(58	)
Balance at June 30, 2011	$	835		$	2,473	$	3,308

The components of intangible assets as at June 30, 2011 and March 31, 2011 were as follows:

	As of June 30, 2011
			Accumulated
	Cost		Amortization			Net
	(in thousands)

Software	$	1,611	$	(776	)	$	835
Trade name / Trademark		2,473		-			2,473
Customer list		1,220		(1,220	)		-
License agreements		443		(443	)		-
	$	5,747	$	(2,439	)	$	3,308

	As of March 31, 2011
			Accumulated
	Cost		Amortization			Net
	(in thousands)

Software	$	1,611	$	(718	)	$	893
Trade name / Trademark		2,473		-			2,473
Customer list		1,220		(1,220	)		-
License agreements		443		(443	)		-
	$	5,747	$	(2,381	)	$	3,366

The Company has included amortization of acquired intangible assets directly attributable to revenue-generating activities in cost of revenues. The Company has included amortization of acquired intangible assets not directly attributable to revenue-generating activities in operating expenses. During the periods ended June 30, 2011 and 2010, the Company recorded amortization expense for continuing operations in the amount of $58 and $76, respectively, in cost of revenues; and amortization expense in the amount of $0 and $17 respectively, in operating expenses. During the periods ended June 30, 2011 and 2010 the Company recorded amortization expense for discontinued operations in the amount of $0 and $26, respectively, in cost of revenues; and amortization expense in the amount of $0 and $40, respectively, in operating expenses.

Based on the amortizable intangible assets as of June 30, 2011, we estimate amortization expense for the next five years to be as follows:

	Amortization
Year Ending June 30,	Expense
	(in thousands)

2012	$	230
2013		230
2014		230
2015		145
	$	835

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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