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Note 4 - BALANCE SHEET COMPONENTS

9 Months Ended

Sep. 30, 2022

Accounts receivable

Accounts receivable include amounts that are unbilled at the end of the period that are expected to be billed and collected within a 12-month period. Unbilled accounts receivable, included in accounts receivable, totaled $9.8 million and $11.8 million as of September 30, 2022, and December 31, 2021, respectively. Unbilled accounts receivable that are not expected to be billed and collected during the succeeding 12-month period is recorded in other non-current assets and totaled $1.0 million and $1.3 million as of September 30, 2022, and December 31, 2021, respectively.

The Company performs ongoing credit evaluations of its customers’ financial condition. An allowance for doubtful accounts is maintained for probable credit losses based upon the Company’s assessment of the expected collectability of the accounts receivable. The allowance for doubtful accounts is reviewed on a quarterly basis to assess the adequacy of the allowance.

Property and equipment

Property and equipment, net consist of the following (in thousands):


	September 30,		December 31,
	2022		2021
Computer equipment	$	11,711	$	11,924
Software		5,359		5,419
Furniture, fixtures and equipment		2,467		2,506
Leasehold improvements		6,277		6,272
Laboratory and other equipment		4,340		3,981
Test equipment		28,311		24,452
Construction-in-progress		24,965		22,158
		83,430		76,712
Less: Accumulated depreciation and amortization		(44,690)		(41,417)
Total	$	38,740	$	35,295

Test equipment mainly includes DFI™ systems and CV^® systems assets at customer sites that are contributing to revenue. Among assets under construction, the construction-in-progress balance related to construction of DFI™ systems assets amounted to $20.1 million and $20.0 million as of September 30, 2022, and December 31, 2021, respectively. Depreciation and amortization expense was $1.4 million and $1.5 million during the three months ended September 30, 2022 and 2021, respectively, and $4.2 million and $4.8 million during the nine months ended September 30, 2022 and 2021, respectively.

In the fourth quarter of 2021, the Company wrote down the value of its property and equipment by $3.2 million related to its first-generation of e-beam tools for DFI™ systems wherein carrying values may not be fully recoverable due to lack of market demand and future needs of our customers for these tools.

Goodwill and Intangible Assets, Net

As of September 30, 2022, and December 31, 2021, the carrying amount of goodwill was $14.1 million.

Intangible assets, net, consisted of the following (in thousands):


		September 30, 2022						December 31, 2021
	Amortization	Gross				Net		Gross				Net
	Period	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	(Years)	Amount		Amortization		Amount		Amount		Amortization		Amount
Acquired identifiable intangibles:
Customer relationships	1-10	$	9,407	$	(6,524)	$	2,883	$	9,407	$	(6,041)	$	3,366
Developed technology	4-9		33,635		(19,046)		14,589		33,635		(17,250)		16,385
Tradename and trademarks	2-10		1,598		(892)		706		1,598		(812)		786
Patent	7-10		2,100		(1,674)		426		1,800		(1,640)		160
Noncompetition agreements	3		848		(518)		330		848		(306)		542
Total		$	47,588	$	(28,654)	$	18,934	$	47,288	$	(26,049)	$	21,239

The weighted average amortization period for acquired identifiable intangible assets was 6.1 years as of September 30, 2022. The following table summarizes intangible assets amortization expense in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Amortization of acquired technology included under Costs of Revenues	$	553	$	456	$	1,659	$	1,525
Amortization of acquired intangible assets presented separately under Costs and Expenses		318		314		946		942
Total amortization of acquired intangible assets	$	871	$	770	$	2,605	$	2,467

The Company expects annual amortization of acquired identifiable intangible assets to be as follows (in thousands):


Year Ending December 31,	Amount
2022 (remaining three months)	$	879
2023		3,491
2024		3,093
2025		2,928
2026		2,759
2027 and thereafter		5,784
Total future amortization expense	$	18,934

There were no impairment charges for goodwill and intangible assets during the three and nine months ended September 30, 2022 and 2021.