Note 8 - Goodwill

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Goodwill Disclosure [Text Block]

8. Goodwill

The following table provides a roll forward of goodwill for the years ended December 31, 2024 and 2023:

	As of December 31,
	2024			2023
Balance, beginning January 1	$	7,571		$	7,339
Effect of foreign currency adjustments		(446	)		232
Balance, ending December 31	$	7,125		$	7,571

The goodwill balance at December 31, 2024 and 2023 was related to the legacy Anika reporting unit.

The Company estimated the fair value of its reporting units using a discounted cash flow method, which is based on the present value of projected cash flows and a terminal value, which represents the expected normalized cash flows of the reporting units beyond the cash flows from the discrete projection period. The Company determined that a discounted cash flow model provided the best approximation of fair value of the reporting units for the purpose of performing the impairment test. This approach incorporates significant estimates and assumptions related to the forecasted results including revenues, expenses, the achievement of certain cost synergies, terminal growth rates and discount rates to estimate future cash flows. While assumptions utilized are subject to a high degree of judgment and complexity, the Company made its best estimate of future cash flows under a high degree of economic uncertainty that existed as of November 30, 2024. In developing its assumptions, the Company also considered observed trends of its industry participants.

For the legacy Anika reporting unit, the Company performed a qualitative assessment as of November 30, 2024. The results of the impairment test indicated that the estimated fair value of the legacy Anika reporting unit was greater than its carrying value, therefore the Company determined that was more likely than not that the fair value of the legacy Anika reporting unit was not impaired as of November 30, 2024.