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Note 8 - Intangible Assets

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE 8 INTANGIBLE ASSETS

Intangible assets at June 30, 2024 and December 31, 2023 are comprised as follows:

(in thousands)		June 30, 2024
		Gross Carrying Value				Accumulated Amortization				Accumulated Impairment Losses				Net Carrying Value
Intangible assets subject to amortization:
Database		$	4,918			$	4,918			$	—			$	—
Vehicle service agreements in-force			3,680				3,680				—				—
Customer relationships			40,142				22,361				—				17,781
Developed technology			600				49				—				551
Intangible assets not subject to amortization:
Trade names			14,667				—				1,201				13,466
Total		$	64,007			$	31,008			$	1,201			$	31,798

(in thousands)		December 31, 2023
		Gross Carrying Value				Accumulated Amortization				Net Carrying Value
Intangible assets subject to amortization:
Database		$	4,918			$	4,918			$	—
Vehicle service agreements in-force			3,680				3,680				—
Customer relationships			39,942				19,521				20,421
Developed technology			600				18				582
Intangible assets not subject to amortization:
Trade names			14,667				—				14,667
Total		$	63,807			$	28,137			$	35,670

As further discussed in Note 5, "Acquisitions and Discontinued Operations," during the six months ended June 30, 2024, the Company recorded a measurement period adjustment related to acquisition of DDI that increased the customer relationships intangible asset by $0.2 million.

The Company's intangible assets with definite useful lives are amortized either based on the patterns in which the economic benefits of the intangible assets are expected to be consumed or using the straight-line method over their estimated useful lives, which range from 7 to 15 years. Amortization of intangible assets was $1.5 million and $1.4 million for the three months ended June 30, 2024 and June 30, 2023, respectively ($2.9 million and $2.8 million for the six months ended June 30, 2024 and June 30, 2023, respectively).

The trade names intangible assets have indefinite useful lives and are not amortized. Indefinite-lived intangible assets are assessed for impairment annually as of November 30, or more frequently if events or circumstances indicate that the carrying value may not be recoverable. The Company may perform its impairment test for any indefinite-lived intangible asset through a qualitative assessment or elect to proceed directly to a quantitative impairment test, however, the Company may resume a qualitative assessment in any subsequent period if facts and circumstances permit.

At March 31, 2024 and June 30, 2024, the Company determined that certain trade names should be further examined under a quantitative approach due to actual revenue coming in lower than previous projections. Based upon these assessments, the Company recorded impairment charges for the three and six months ended June 30, 2024 of $0.7 million and $1.2 million, respectively, related to the SNS and CSuite indefinite-lived trade names. The fair value of the SNS and CSuite trade names were estimated using the relief-from-royalty method. The significant unobservable inputs used in the relief-from-royalty method, which are level 3 inputs, include a royalty rate and discount rate. The reduction in value is primarily due to higher discount rates and reduction in projected revenue. Future impairments may be recorded if discount rates increase further, or if actual revenue falls short of current projections. No impairment charges were recorded during the three and six months ended June 30, 2023.