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Note 10 - Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2025

Goodwill and Intangible Assets Disclosure [Text Block]

Note 10 - Goodwill and Intangible Assets

Annual impairment test

During the third quarter of 2024, we completed our annual review of goodwill for potential impairment using a quantitative assessment for all of our reporting units. The fair value of each reporting unit was estimated using a weighting of a discounted cash flow model and prices of comparable businesses. As a result of this review, we concluded that the carrying value of our MRI reporting unit exceeded its estimated fair value resulting in an impairment charge of approximately $4.8 million. The goodwill impairment was primarily attributable to industry and market conditions effecting the overall financial performance of the reporting unit. These industry and market conditions were deemed a triggering event that led us to also review the fair value of certain indefinite-lived intangible assets related to the MRI reporting unit. As a result of this review we concluded the carrying value of the trade name related to MRI exceeded its estimated fair value resulting in an impairment charge of approximately $1.2 million. The related impairment was primarily attributable to industry and market conditions effecting the overall financial performance of the reporting unit. The balance for the trade name related to MRI was approximately $940 thousand at March 31, 2025 and at December 31, 2024.

The table below reflects our goodwill and changes in the carrying value:

(in thousands)
Goodwill balance at December 31, 2024	$	1,633
Impairment charge during 2025		-
Goodwill balance at March 31, 2025	$	1,633

Goodwill before impairment	$	6,428
Accumulated impairment charge		(4,795	)
Goodwill balance at March 31, 2025	$	1,633

Intangible Assets

The following table reflects our finite-lived and indefinite-lived intangible assets:

		*March 31, 2025*							*December 31, 2024*
(in thousands except useful life)	*Estimated useful life*		*Gross*		*Accumulated amortization*			*Net*		*Gross*		*Accumulated amortization and impairment*			*Net*
Finite-lived intangible assets:
Franchise agreements	15 years	$	25,556	$	(6,245	)	$	19,311	$	25,556	$	(5,819	)	$	19,737
Purchased software	7 years		3,200		(1,600	)		1,600		3,200		(1,486	)		1,714
Internally developed software	5 years		3,125		(1,120	)		2,005		3,125		(963	)		2,162
Total finite-lived intangible assets			31,881		(8,965	)		22,916		31,881		(8,268	)		23,613
Indefinite-lived intangible assets:
Domain name	Indefinite		2,226		-			2,226		2,226		-			2,226
Trade name	Indefinite		2,340		-			2,340		3,580		(1,240	)		2,340
Total intangible assets		$	36,447	$	(8,965	)	$	27,482	$	37,687	$	(9,508	)	$	28,179

Amortization expense related to intangible assets totaled approximately $696 thousand and $656 thousand for the three months ended March 31, 2025 and March 31, 2024, respectively.