XML 27 R12.htm IDEA: XBRL DOCUMENT

Note 5 - Intangible Assets

12 Months Ended

Dec. 31, 2023

Intangible Assets Disclosure [Text Block]

NOTE 5 – INTANGIBLE ASSETS

Finite-lived Intangible Assets

Finite-lived intangible assets consist of patents and trademarks, developed technology, customer relationships, and tradenames, and are amortized over their estimated useful life. Amortization expense was $27,426 and $414,706 in 2023 and 2022, respectively. Accumulated amortization is included in intangibles, net in the accompanying consolidated balance sheets. The Company reviews finite-lived intangible assets for impairment in accordance with ASC 360, whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Events or changes in circumstances that indicate the carrying amount may not be recoverable include, but are not limited to, a significant change in the medical device marketplace and a significant adverse change in the business climate in which the Company operates.

As of December 31, 2023, there were $252,457 in net intangibles as compared to $253,865 in net intangibles as of December 31, 2022.

The components of intangible assets were as follows:

	As of December 31, 2023							As of December 31, 2022
	Gross Carrying Costs		Accumulated Amortization			Net Carrying Amount		Gross Carrying Costs		Accumulated Amortization			Impairment			Net Carrying Amount
Patents & Trademarks	$	535,096	$	(286,639	)	$	252,457	$	509,141	$	(255,276	)	$	-		$	253,865
Developed Technology		-		-			-		3,500,000		(386,459	)		(3,113,541	)		-
Customer Relationships		-		-			-		200,000		(22,083	)		(177,917	)		-
Tradename		-		-			-		80,000		(22,083	)		(57,917	)		-
Total	$	535,096	$	(286,639	)	$	252,457	$	4,289,141	$	(685,901	)	$	(3,349,375	)	$	253,865

The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2023:

Year ending December 31,	Expense
2024	$	27,451
2025		27,451
2026		27,451
2027		27,451
2028		27,451
Thereafter		115,202
Total	$	252,457

No impairment charges related to finite-lived intangible assets were incurred during the year ended December 31, 2023.

In the fourth quarter of 2022, the Company identified a change in its future projected cash flows related to certain of its asset groups. The Company prepared an undiscounted cash flow for these asset groups as of December 31, 2022 as required under ASC 360 and determined the carrying amounts exceeded the estimated undiscounted future cash flows for those asset groups. The Company determined the fair value of the asset groups and concluded that the finite-lived intangible assets of its former zPREDICTA asset group, which is now reported within the Pittsburgh operating segment, were fully impaired as of December 31, 2022, and recognized an impairment loss of $3,349,375 on those finite-lived intangible assets during the fourth quarter of 2022. The Company also recognized an impairment loss on its property and equipment in the Soluble and Corporate asset groups during the fourth quarter of 2022. See Note 4 – Property and Equipment.

Goodwill

Goodwill of $7,231,093 was recognized in the zPREDICTA acquisition in 2021 and represented the excess of the consideration transferred over the fair values of assets acquired and liabilities assumed. During the second quarter of 2022, the Company concluded that potential impairment indicators were present and that an impairment assessment was warranted for goodwill. In testing goodwill for impairment as of June 30, 2022, the Company performed a quantitative impairment test, including computing the fair value of the former zPREDICTA reporting unit and comparing that value to its carrying value. Based upon the Company’s quantitative goodwill impairment test, the Company concluded that goodwill was fully impaired as of June 30, 2022. When evaluating the fair value of the former zPREDICTA reporting unit, the Company used a discounted cash flow model and market comparisons. Key assumptions used to determine the estimated fair value included: (a) expected cash flow for the 10-year period following the testing date (including net revenues, costs of revenues, and operating expenses as well as estimated working capital needs and capital expenditures) and (b) an estimated terminal value using a terminal year growth rate of 4.0% determined based on the growth prospects of the reporting unit. The Company further used a probability weighting of various forecasts to address forecast risk. The Company used an estimated discount rate of 65% based on management’s best estimate and considering the Company’s current market capitalization. The majority of the inputs used in the discounted cash flow model were unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation were considered Level 1 inputs. zPREDICTA Inc. was merged with Predictive Oncology Inc. at the end of 2022 and is now reported as part of the Pittsburgh operating segment.

The following tables present changes in the carrying value of goodwill on our consolidated balance sheet:

Goodwill balance at December 31, 2021	$	6,857,790
Adjustment to fair value		373,303
Impairment		(7,231,093	)
Goodwill balance at December 31, 2022	$	-