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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2022

2. Goodwill and Intangible Assets

Goodwill

As of September 30, 2022, the Company performed its annual goodwill impairment analysis on one of its reporting units, the Agility segment. The Company also tested for impairment intangible assets for the Agility and Synodex segments. The impairment test involves estimating the fair value based on a combination of income (estimates of future discounted cash flows) and the market approach (market multiples for similar companies) using unobservable inputs (Level 3). The income approach uses a discounted cash flow (“DCF”) method that utilizes the present value of cash flows to estimate the segment’s fair value. The future cash flows of the segment were projected based on the Company’s estimates of future revenue, operating income, and other factors such as working capital and capital expenditures. As part of the DCF analysis, the Company projected revenue and operating profits and assumed long-term revenue growth rates in the terminal year. The market approach utilizes multiples of revenues and earnings before interest expense, taxes, depreciation, and amortization (“EBITDA”) to estimate the segment’s fair value. The market multiples used for the segment were based on a group of comparable companies’ market multiples applied to the Company’s revenue. The Company concluded that there is no impairment of goodwill and intangible assets for the Agility and Synodex segments.

The change in the carrying amount of goodwill for the nine months ended September 30, 2022 was as follows (in thousands):


Balance as of January 1, 2022	$	2,143
Foreign currency translation adjustment		(161)
Balance as of September 30, 2022	$	1,982

The fair value measurement of goodwill for the Agility segment was classified within Level 3 of the fair value hierarchy because the Company used the income approach, which utilizes significant inputs that are unobservable in the market and the market multiple approach which utilizes comparable entities to further validate the carrying values. The Company believes it made reasonable estimates and assumptions to calculate the fair value of the reporting unit as of the impairment test measurement date.

Intangibles

Information regarding the Company acquired intangible assets and capitalized developed software was as follows (in thousands):


											Capitalized Developed
	Company Acquired Intangible Assets										Software
													Capitalized
					Trademarks				Media		Capitalized		Developed
	Developed		Customer		and				Contact		Developed		Software - in
	technology		relationships		tradenames		Patents		Database		Software		Progress		Total
Gross carrying amounts:
Balance as of January 1, 2022	$	3,169	$	2,228	$	880	$	45	$	3,648	$	8,576	$	635	$	19,181
Additions		-		-		-		-		-		-		4,244		4,244
Transfers		-		-		-		-		-		2,882		(2,882)		-
Foreign currency translation		(235)		(162)		(42)		(3)		(284)		(656)		(12)		(1,394)
Balance as of September 30, 2022	$	2,934	$	2,066	$	838	$	42	$	3,364	$	10,802	$	1,985	$	22,031

Accumulated amortization:
Balance as of January 1, 2022	$	2,158	$	1,377	$	685	$	34	$	2,005	$	2,575	$	-	$	8,834
Amortization expense		235		139		42		3		267		1,286		-		1,972
Foreign currency translation		(175)		(110)		(30)		(3)		(170)		(229)		-		(717)
Balance as of September 30, 2022	$	2,218	$	1,406	$	697	$	34	$	2,102	$	3,632	$	-	$	10,089

Net carrying values - September 30, 2022	$	716	$	660	$	141	$	8	$	1,262	$	7,170	$	1,985	$	11,942


	Company Acquired Intangible Assets										Capitalized Developed Software
													Capitalized
					Trademarks				Media		Capitalized		Developed
	Developed		Customer		and				Contact		Developed		Software - in
	technology		relationships		tradenames		Patents		Database		Software		Progress		Total
Gross carrying amounts:
Balance as of January 1, 2021	$	3,175	$	2,228	$	882	$	45	$	3,670	$	5,507	$	1,360	$	16,867
Additions		-		-		-		-		-		376		2,005		2,381
Transfers		-		-		-		-		-		2,752		(2,752)		-
Foreign currency translation adjustment		(6)		-		(2)		-		(22)		(59)		22		(67)
Balance as of December 31, 2021	$	3,169	$	2,228	$	880	$	45	$	3,648	$	8,576	$	635	$	19,181

Accumulated amortization:
Balance as of January 1, 2021	$	1,844	$	1,192	$	629	$	29	$	1,650	$	1,492	$	-	$	6,836
Amortization expense		315		187		56		5		354		1,089		-		2,006
Foreign currency translation adjustment		(1)		(2)		-		-		1		(6)		-		(8)
Balance as of December 31, 2021	$	2,158	$	1,377	$	685	$	34	$	2,005	$	2,575	$	-	$	8,834

Net carrying amounts - December 31, 2021	$	1,011	$	851	$	195	$	11	$	1,643	$	6,001	$	635	$	10,347

Amortization expense relating to acquired intangible assets was $0.2 million and $0.7 million for the three and nine months ended September 30, 2022.

Amortization expense relating to capitalized developed software was $0.5 million and $1.3 million for the three and nine months ended September 30, 2022.

As of September 30, 2022, estimated future amortization expense for intangible assets was as follows (in thousands):


Year	Amortization
2022	$	761
2023	$	3,579
2024	$	3,124
2025	$	2,217
2026	$	818
Thereafter	$	1,443
	$	11,942