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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2023

Note 8. Goodwill and Intangible Assets

Goodwill

The following table represents the changes in the carrying value of goodwill for the years ended December 31, 2023 and 2022 (in thousands):


	December 31,		December 31,
	2023		2022
Balance at beginning of year	$	151,117	$	146,954
Foreign currency adjustment		(284)		(5,391)
Goodwill impairment		(49,569)		—
Goodwill related to Tec4med acquisition		2,694		—
Goodwill related to Bluebird acquisition		4,445		—
Goodwill related to CTSA and F-airGate acquisitions		—		6
Goodwill related to Cell&Co acquisition		—		2,785
Goodwill related to Polar Expres acquisition		—		1,828
Goodwill related to Cell Matters acquisition		—		4,935
Total	$	108,403	$	151,117

Impairment of Goodwill

We performed our annual impairment test of goodwill for the CRYOPDP and MVE reporting units as of October 1, 2023, with the assistance of an independent third party valuation specialist, using management’s updated annual financial and operational plans. Based on our analysis, we concluded that there has been no impairment of the goodwill associated with the CRYOPDP reporting unit as its carrying value did not exceed its estimated fair value. We concluded that our MVE reporting unit’s carrying value exceeded its estimated fair value, and as a result, we recorded a goodwill impairment charge of $49.6 million related to the MVE reporting unit in the consolidated statement of operations for the year ended December 31, 2023.

Our goodwill impairment test was performed using a combination of both an income and a market approach to determine the fair value of the MVE reporting unit. The income approach utilized the estimated discounted cash flows for MVE while the market approach utilized comparable peer group information. Estimates and assumptions used in the income approach included projected cash flows for MVE and a discount rate determined using a weighted average cost of capital for risk factors specific to MVE and other market and industry data. The discount rate selected was 12.0%. The other key estimates and assumptions used in the discounted cash flow method include, but are not limited to, revenue and EBITDA growth rates, and a terminal growth rate. The estimates and assumptions used in our assessment represent a Level 3 measurement because they are supported by little or no market activity and reflect our own

assumptions in measuring fair value. The assumptions used in our impairment analysis are inherently subject to uncertainty and, therefore, small changes in these assumptions could have a significant impact on the concluded value.

As a result of the impairment, the carrying value of the MVE reporting unit now approximates its fair value. Changes in our future operating results, cash flows, share price, market capitalization or discount rates used when conducting future goodwill impairment tests could affect the estimated fair value of the MVE reporting unit and may result in additional goodwill impairment charges in the future. The Company will continue to monitor events occurring or circumstances changing which may suggest that goodwill should be reevaluated during interim periods prior to the annual impairment test. As of December 31, 2023, remaining goodwill allocated to the MVE reporting unit was $55.2 million.

Intangible Assets

The following table presents our intangible assets as of December 31, 2023 (in thousands):


							Weighted
					Net		Average
	Gross		Accumulated		Carrying		Amortization
	Amount		Amortization		Amount		Period (years)
Non-compete agreement	$	810	$	368	$	442	5
Technology		50,376		11,205		39,171	9
Customer relationships		131,578		29,964		101,614	11
Trade name/trademark		938		211		727	10
Agent network		13,761		8,148		5,613	3
Order backlog		2,600		2,600		—	—
Land use rights		2,255		247		2,008	34
Patents and trademarks		44,932		125		44,807	—
Total	$	247,250	$	52,868	$	194,382

The following table presents our intangible assets as of December 31, 2022 (in thousands):


							Weighted
					Net		Average
	Gross		Accumulated		Carrying		Amortization
	Amount		Amortization		Amount		Period (years)
Non-compete agreement	$	390	$	280	$	110	1
Technology		36,592		8,056		28,536	9
Customer relationships		131,716		21,254		110,462	12
Trade name/trademark		820		158		662	13
Agent network		11,667		6,199		5,468	2
Order backlog		2,600		2,600		—	—
Land use rights		2,378		257		2,121	35
Patents and trademarks		45,181		1,531		43,650	—
Total	$	231,344	$	40,335	$	191,009

Amortization expense for intangible assets for the years ended December 31, 2023, 2022 and 2021 was $16.3 million, $15.1 million and $14.4 million, respectively.

Expected future amortization of intangible assets as of December 31, 2023 is as follows (in thousands):


Years Ending December 31,	Amount
2024		16,897
2025		14,878
2026		14,590
2027		14,245
2028		13,199
Thereafter		70,927
	$	144,736