Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2023

Intangible Assets and Goodwill

Intangible Assets And Goodwill

10. Intangible Assets and Goodwill

On December 31, 2022, the Company determined there was a triggering event, primarily caused by a sustained decrease in the Company's stock price and we retained an independent third-party valuation firm to assist management in performing the quantitative impairment tests. The results of the goodwill and intangible asset impairment tests indicated that the carrying value of goodwill exceeded the estimated fair value and no impairment was required for intangible assets. Thus, as of December 31, 2022, the Company recorded an impairment of $32.6 million related to its goodwill book value for the software solutions operating segment. For further information, see Note 1 (Significant Accounting Polices).

On November 1, 2022, the Company acquired $7,000 in intangible assets in connection with the Allegiant Networks business acquisition. On June 1, 2021, the Company acquired $21,100 in intangible assets in connection with the NetSapiens business acquisition. On January 14, 2021, the Company acquired $2,200 in intangible assets in connection with the Centric Telecom business acquisition. 

Acquired intangible assets subject to amortization consist of the following (in thousands):

	December 31, 2023							December 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	26,073	$	(5,260	)	$	20,813	$	26,073	$	(3,052	)	$	23,021
Developed technologies		4,900		(2,269	)		2,631		4,900		(1,410	)		3,490
Trademark and trade names		400		(288	)		112		400		(186	)		214
Total acquired intangible assets	$	31,373	$	(7,817	)	$	23,556	$	31,373	$	(4,648	)	$	26,725

As of December 31, 2023, the weighted average remaining useful life for customer relationships was 13.4 years, developed technologies was 3.7 years, and trademarks and trade names was 1.7 years.

Amortization expense for customer relationships intangible assets is included in sales and marketing expenses and totaled $2,183 and $1,433 for the years ended December 31, 2023 and 2022, respectively. Amortization expense for developed technologies intangible assets is included in cost of software solutions revenue and totaled $860 and $882 for the years ended December 31, 2023 and 2022, respectively. Amortization expense for trademark and trade name intangible assets is included in general and administrative expenses and totaled $127 and $121 for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, annual amortization of definite lived intangible assets, based on existing intangible assets and current useful lives, is estimated to be the following (in thousands):

Year ending December 31,
2024	$	3,028
2025		2,770
2026		2,457
2027		2,202
2028 and thereafter		13,099
Total	$	23,556

The following table provides a summary of changes in the carrying amounts of goodwill (in thousands):

	Goodwill
Balance at January 1, 2022	$	36,972
Centric Telecom business acquisition		5,091
Impairment		(32,609	)
Balance at December 31, 2022		9,454
Additions		-
Balance at December 31, 2023	$	9,454