Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

In accordance with FASB ASC Topic No. 350, Intangibles-Goodwill and Other, Smith Micro reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing will be performed annually on December 31. Recoverability of goodwill is determined by comparing the fair value of the Company’s reporting unit to the carrying value of the underlying net assets in the reporting unit. If the fair value of a reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. The Company determined that there were no goodwill impairment indicators at September 30, 2022 and December 31, 2021.

The components of the Company’s intangible assets were as follows for the periods presented :

	September 30, 2022							December 31, 2021
	(unaudited, in thousands, except for useful life data)							(audited, in thousands, except for useful life data)
	Weighted Average Remaining Useful Life (in Years)	Gross		Accumulated Amortization		Net Book Value		Weighted Average Remaining Useful Life (in Years)	Gross		Accumulated Amortization		Net Book Value
Purchased technology	7	$	13,529	$	(5,320)	$	8,209	8	$	13,529	$	(3,764)	$	9,765
Customer relationships	12	27,960		(4,380)		23,580		13	27,960		(2,816)		25,144
Customer contracts	1	7,000		(5,396)		1,604		2	7,000		(4,441)		2,559
Software license	7	5,419		(1,362)		4,057		9	5,419		(793)		4,626
Non-compete	0	283		(254)		29		1	283		(196)		87
Patents	5	600		(214)		386		5	600		(150)		450
Total		$	54,791	$	(16,926)	$	37,865		$	54,791	$	(12,160)	$	42,631

The Company amortizes intangible assets over the pattern of economic benefit expected to be generated from the use of the assets, with a total weighted average amortization period of approximately 10 years as of September 30, 2022 and December 31, 2021.

As of September 30, 2022, estimated amortization expense for the remainder of 2022 and thereafter was as follows (unaudited, in thousands):

Year Ending December 31,	Amortization Expense
2022	$	1,545
2023	5,874
2024	5,635
2025	5,402
2026	5,007
2027 and thereafter	14,402
Total	$	37,865