Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Other Intangible Assets [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 12 GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The following table sets forth the changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021:

(Amounts in thousands)	Total
Balance at December 31, 2020	$	64,850
Recognition		35,478
Impairments		(62,385	)
Balance at December 31, 2021		37,943
Derecognition		(74	)
Impairments		(29,340	)
Reclassified to held for sale		(1,219	)
Balance at December 31, 2022	$	7,310

During the year ended December 31, 2022, the Company, with the assistance of a 3^rd party appraiser, determined that it was more likely than not that certain reporting unit’s fair value were below their reporting unit’s carrying amounts due to declines in the Company’s market. As a result, the Company determined it was a triggering event. Accordingly, it was necessary to perform impairment testing. The appraiser used a methodology that incorporated both market metrics and cash flows to arrive at the fair values. During the year ended December 31, 2022, the Company, utilizing a 3-6.3% revenue growth rate and a weighted-average cost of capital range of 14%, recorded impairment charges for goodwill in the aggregate amount of $29.3 million (see Note 2 – Summary of Significant Accounting Policies – Long-Lived Assets and Goodwill). During the year ended December 31, 2021, the Company recorded an impairment charge for goodwill in the amount of $62.4 million.

Intangible Assets

The following table sets forth the gross carrying amounts and accumulated amortization of the Company’s intangible assets as of December 31, 2022 and 2021:

(Amounts in thousands)	Trade Names			Licenses			Technology			Customer Relationships			Intellectual Property			Software			Total
Net balance at December 31, 2020	$	4,623		$	316		$	29,476		$	15,716		$	3,057		$	-		$	53,188
Additions		292			-			8,477			9,273			-			741			18,783
Impairments		(4,915	)		(281	)		(16,769	)		(21,705	)		-			-			(43,670	)
Amortization		-			(35	)		(6,988	)		(3,284	)		(2,466	)		(68	)		(12,841	)
Net balance at December 31, 2021		-			-			14,196			-			591			673			15,460
Reclassified to held for sale		-			-			(246	)		-			-			-			(246	)
Derecognition		-			-			(580	)		-			-			-			(580	)
Impairments		-			-			(11,611	)		-			-			(487	)		(12,098	)
Amortization		-			-			(980	)		-			(60	)		(68	)		(1,108	)
Net balance at December 31, 2022	$	-		$	-		$	779		$	-		$	531		$	118		$	1,428

On June 23, 2022, the Company executed an agreement to return fifteen patents and five pending or provisional patents to the former owners of Innovation Digital, LLC (“Innovation Digital”) which resulted in the derecognition of goodwill and intangible assets shown in the tables above.

During the year ended December 31, 2022, the Company recorded impairment charges for other definite-lived intangible assets in the aggregate amount of $12.1 million. During the year ended December 31, 2021, the Company recorded an impairment charge for other definite-lived intangible assets in the amount of $43.7 million.

During the years ended December 31, 2022 and 2021, the Company recorded amortization expense of intangible assets of $1.1 million and $12.8 million, respectively. The Company’s amortization is based on no residual value using the straight-line amortization method as it best represents the benefit of the intangible assets.

The following table sets forth the weighted-average amortization period, in total and by major intangible asset class.

Asset Class	Weighted- Average Amortization Period
Technology		9.48 years
Intellectual property		9.50 years
Software		9.50 years
All intangible assets		9.49 years

As of December 31, 2022, the expected amortization expense for the existing unamortized acquired intangible assets for the next five years and thereafter was as follows:

(Amounts in thousands)	Amount
2023	$	151
2024		151
2025		151
2026		151
2027		151
Thereafter		673
All intangible assets	$	1,428

As part of the Company’s restructuring, commencing January 1, 2023, the Company has integrated its previously separate reporting units, including employing a single integrated sales function, and the Chief Executive Officer intends to manage the Company and make decisions based on the Company’s consolidated operating results. Accordingly, beginning on January 1, 2023, management has determined that the Company represents a single reporting unit.