XML 101 R44.htm IDEA: XBRL DOCUMENT v3.23.1
Goodwill and Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of changes in carrying amount of goodwill
The following table summarizes changes in the carrying amount of goodwill for the years ended December 31, 2022, 2021 and 2020 (in thousands):
Balance as of January 1, 202031,654 
Measurement period adjustments(12,848)
Effect of change in foreign currency exchange rates(12)
Impairment loss (a)(18,089)
Balance as of January 1, 2021705 
Measurement period adjustments186 
Impairment (b,c,d,f,g)(101,470)
Acquisitions117,445 
Effect of change in foreign currency exchange rates(1)
Disposal of Grapevine (e)(704)
Balance as of January 1, 202216,161 
Measurement period adjustments1,280 
Impairment (g,h)(38,868)
Acquisitions60,394 
Effect of change in foreign currency exchange rates(1,192)
Balance as of December 31, 2022$37,775 
(a)Throughout 2021, the Company pursued its initial business goals for DBOT involving the sale of digital securities and brokering commodity products, more specifically investigating applications to new and underserved markets, or targeting of specific transactions, such as the origination of foreign securities, the formation of an investment vehicle with a third-party, or the securitization of digital assets. These efforts did not come to fruition, and the Company concluded sufficient impairment indicators existed to evaluate the fair value of DBOT’s intangible assets. As part of this fair value analysis, the Company determined that the goodwill associated with the DBOT acquisition was fully impaired and recorded an impairment loss of $9.3 million. Refer to Note 9 for information regarding the impairment of the continuing membership agreement and customer list.

The Company acquired Tree Technologies in December, 2019 and determined that there were immaterial errors in the initial accounting for the acquisition. A deferred tax liability should have been recorded in connection with the acquisition, with a corresponding amount of goodwill of $8.3 million. Tree Technologies business objectives developed more slowly than originally projected, due to a revaluation of the market opportunity, both in the context of the time and amount of investment required to achieve the originally projected results, and further complicated by various factors, including COVID-19, the temporary closures of businesses in the area, which resulted in the lack of demand for motorbikes, rolling business and government shutdowns, and supply chain constraints. The Company determined that sufficient impairment indicators existed and decided to perform a quantitative impairment analysis in the three months ended December 31, 2020.

Under the income approach, the Company estimated the fair value of Tree Technologies based on the present value of estimated future cash flows which are Level 3 unobservable inputs in the fair value hierarchy. The Company utilized cash flow projections based on information known and knowable at that time, and included management's estimates of revenue growth rates and operating margins, taking into consideration the historical performance and the then current macroeconomic industry and market conditions. The Company based the discount rate on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to Tree Technologies’ ability to execute on its business plan.

(b)On July 26, 2021, Timios experienced a systems outage that was caused by a cybersecurity incident, which caused disruption to parts of Timios’ business, including its ability to perform its mortgage title, closing and escrow services offerings. This resulted in an adverse impact on Timios’ revenues in that one significant customer was lost and other customers have reduced their volume. The Company determined that an indicator of potential impairment existed and decided to perform an interim quantitative tangible and intangible asset and goodwill impairment tests for its Timios reporting unit.

Based on the results of this interim quantitative impairment test, the fair value of the Timios reporting unit was below the carrying value of its net assets. The decline in the fair value of the Timios reporting unit resulted from the cybersecurity event described above, which lowered the projected revenue and profitability levels of the reporting unit. The fair value of the Timios reporting unit was based on the income approach. Under the income approach, the Company estimated the fair value of the reporting unit based on the present value of estimated future cash flows which are Level 3 unobservable inputs in the fair value hierarchy. The Company prepared cash flow projections based on management's estimates of revenue growth rates and operating margins, taking into consideration the historical performance and the current macroeconomic industry and market conditions. The Company based the discount rate on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the Timios’ ability to execute on the projected cash flows. The fair value of Timios’ reporting unit is based on management’s best estimates, and should actual results differ from those estimates, future impairment charges may be required in future periods.

The quantitative analysis indicated that the carrying amount of the Timios reporting unit exceeded its fair value. As a result, the Company recorded a goodwill impairment charge of $5.6 million, and impairment charges related to the Timios tradename and lender relationships of $0.7 million and $13.2 million, respectively, in the three months ended September 30, 2021.

(c)For the year ended December 31, 2021, market conditions and supply chain issues have had an adverse impact on WAVE’s business forecasts. The projections have negatively impacted WAVE’s performance, resulting in lower gross margins and revenue forecasts being reduced. As a result, the Company recorded a goodwill impairment charge of $35.7 million for the year ended December 31, 2021.

(d)For the period ended December 31, 2021, market conditions and supply chain issues have had an adverse impact on US Hybrid’s business forecasts. The projections have negatively impacted US Hybrid’s performance, resulting in lower gross
margins and revenue forecasts being reduced. As a result, the Company recorded a goodwill impairment charge of $42.2 million for the year ended December 31, 2021.

(e)During the three months ended June 30, 2021, the Company completed the sale of Grapevine. Refer to Note 6 for additional information.

(f)For the period ended December 31, 2021, market conditions and supply chain issues have had an adverse impact on Solectrac's business forecasts. The projections have negatively impacted Solectrac's performance, resulting in lower gross margins and revenue forecasts being reduced. As a result, the Company recorded a goodwill impairment charge of $17.7 million for the year ended December 31, 2021.

(g)During 2022, the financial services industry suffered a significant decline in transaction processing for services provided by Timios driven by continuous increases in lending rates and an industry sector decline. As a result, the projected financial performance of the reporting unit has declined compared to the prior year reflecting the recovery period expected for the industry sector.

Based on the results of the annual quantitative impairment test, the fair value of the Timios reporting unit was below the carrying value of its net assets. The fair value of the Timios reporting unit was based on the income approach. Under the income approach, the Company estimated the fair value of the reporting unit based on the present value of estimated future cash flows which are Level 3 unobservable inputs in the fair value hierarchy. The Company prepared cash flow projections based on management's estimates of revenue growth rates and operating margins, taking into consideration the historical performance and the current macroeconomic industry and market conditions. The Company based the discount rate on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the Timios’ ability to execute on the projected cash flows. The fair value of Timios’ reporting unit is based on management’s best estimates.

The quantitative analysis indicated that the carrying amount of the Timios reporting unit exceeded its fair value. As a result, the Company recorded a goodwill impairment charge of $16.2 million in the year ended December 31, 2022.

(h)While Energica significantly expanded the global dealer network and introduced product into the US market, the business did not meet its performance targets in 2022 and is expected to continue to miss business development targets in 2023. Consequently, updated projections reflecting the longer time period required for market development and sales expansion reflect a related decrease in the enterprise value.

Based on the results of the annual quantitative impairment test, the fair value of the Energica reporting unit was below the carrying value of its net assets. The fair value of the Energica reporting unit was based on the income approach. Under the income approach, the Company estimated the fair value of the reporting unit based on the present value of estimated future cash flows which are Level 3 unobservable inputs in the fair value hierarchy. The Company prepared cash flow projections based on management's estimates of revenue growth rates and operating margins, taking into consideration the historical performance and the current macroeconomic industry and market conditions. The Company based the discount rate on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the Energica’s ability to execute on the projected cash flows. The fair value of Energica’s reporting unit is based on management’s best estimates, and should actual results differ from those estimates, future impairment charges may be required in future periods.

The quantitative analysis indicated that the carrying amount of the Energica reporting unit exceeded its fair value. As a result, the Company recorded a goodwill impairment charge of €21.1 million ($22.7 million) in the year ended December 31, 2022.
Schedule of amortizing and indefinite lived intangible assets
The following table summarizes information regarding amortizing and indefinite lived intangible assets (in thousands):
December 31, 2022December 31, 2021
Weighted
Average
Remaining
Useful Life
(in years)		Gross
Carrying
Amount		Accumulated
Amortization		Impairment LossNet
Balance		Gross
Carrying
Amount		Accumulated
Amortization		Impairment LossNet 
Balance
Amortizing Intangible Assets
Continuing membership agreement (b)16.5$1,179 $(679)$(500)$— $1,179 $(649)$— $530 
Patents, trademarks and brands (a,d,g,f,h,i)37.222,974 (1,625)(1,520)19,829 39,820 (2,715)(30,492)6,613 
Customer relationships13.713,937 (824)— 13,113 — — — — 
Land use rights (c)96.025,653 (649)(25,004)— 27,102 (411)— 26,691 
Licenses (d)21.81,141 (148)— 993 1,000 (65)— 935 
Lender relationships (d)5.016,600 (2,034)(12,548)2,018 16,600 (1,638)(12,550)2,412 
Internally developed software (e,k)1.6760 (266)(494)— 452 (76)— 376 
Software (h,j,k)9.74,491 (1,288)(3,182)21 4,492 (178)— 4,314 
Non-compete (i)0— — — — 520 (57)(463)— 
Technology (h,i)7.218,225 (1,956)— 16,269 7,460 (347)(7,113)— 
Other0.9150 (81)(69)— 150 (6)— 144 
105,110 (9,550)(43,317)52,243 98,775 (6,142)(50,618)42,015 
Indefinite lived intangible assets
Timios Title plant (d)500 — — 500 500 — — 500 
Website name25 — — 25 25 — — 25 
Title License6 — (6)— 6 — — 6 
Patent— — — — — — — — 
Total$105,641 $(9,550)$(43,323)$52,768 $99,306 $(6,142)$(50,618)$42,546 

(a)During the three months ended September 30, 2019, the Company completed the acquisition of additional shares in DBOT, which increased its ownership to 99.0%. Intangible assets of $8.3 million were recognized on the date of acquisition. As part of the determination of the fair value of DBOT's intangible assets mentioned above, the Company utilized the cost method to determine the fair value of the continuing membership agreement, and determined the fair value was $0.6 million, and recorded an impairment loss of $7.1 million. The Company also recorded an impairment loss of $30,000 related to DBOT's customer list. Refer to Note 6 for additional information related to the acquisition.

(b)During the three months ended December 31, 2020, the Company completed the acquisition of a 51.0% interest in Tree Technologies, a Malaysian company engaged in the EV market. As part of the acquisition, Tree Technologies acquired an exclusive right to market and distribute the EVs manufactured by Tree Manufacturing. Upon acquisition, the fair value of this agreement was determined to be $11.3 million. In the three months ended December 31, 2021, Tree Technologies obtained a domestic EV manufacturing license in Malaysia; and therefore determined it would not purchase vehicles from Tree Manufacturing. The Company subsequently severed all commercial relationships with Tree Manufacturing. Accordingly, the Company determined there was no underlying value to the marketing and distribution agreement, and recorded an impairment loss of $12.5 million. Refer to Note 6 for additional information related to the acquisition.

(c)During the three months ended March 31. 2021, the Company completed the acquisition of 100.0% interest in Timios. Refer to Note 6 for additional information related to the acquisition.

(d)Relates to software development costs capitalized during the three months ended September 30, 2021 at Timios. The asset was placed into service in July 2021.

(e)During three months ended March 31, 2021, the Company completed the acquisition of 100% interest in WAVE. Refer to Note 6 for additional information related to the acquisition.

(f)During the three months ended June 30, 2021, the Company completed a stock purchase agreement with FNL, pursuant to which Ideanomics made an investment into FNL, including cash, Ideanomics common stock, and 100% of the common stock outstanding of Grapevine.
(g)During three months ended June 30, 2021, the Company completed the acquisition of privately held Solectrac. Solectrac develops 100% battery-powered, all-electric tractors for agriculture and utility operations. Refer to Note 6 for additional information related to the acquisition.

(h)During three months ended June 30, 2021, the Company completed the acquisition of privately held US Hybrid Corporation. US Hybrid specializes in the design and manufacturing of zero-emission electric powertrain components. Refer to Note 6 for additional information related to the acquisition.

(i)Relates to software costs capitalized during the three months ended September 30, 2021
.
(j)Relates to licensing costs that were capitalized during the three months ended September 30, 2022.
(k)For the year ended December 31, 2022, market conditions have had an adverse impact on Timios’s business forecasts. The projections have negatively impacted Timios’s performance, resulting in lower gross margins and revenue forecasts for 2023 being reduced. As a result, the Company recorded an impairment charge of $1.2 million to the internally generated software for the year ended December 31, 2022.
Schedule of amortization expense The estimated amortization expense related to these intangible assets for each of the years subsequent to December 31, 2022, is as follows (amounts in thousands):
2023 remaining4,000 
20244,000 
20254,000 
20264,000 
20274,000 
2028 and beyond24,145 
Total44,145 
The estimated amortization expense adjusted for the impairment related to the remaining intangible assets for each of the years subsequent to December 31, 2022 is as follows (amounts in thousands):
2023 remaining$933 
2024933 
2025933 
2026933 
2027933 
2028 and beyond3,974 
Total$8,639 
The following table summarizes future expected amortization expense (in thousands):
Years ending December 31,Amortization to be
recognized
2023$4,889 
20244,875 
20254,875 
20264,833 
20274,722 
2028 and thereafter28,049 
Total$52,243