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Intangible Assets

12 Months Ended

Dec. 31, 2024

Intangible Assets [Abstract]

INTANGIBLE ASSETS

NOTE 8 - INTANGIBLE ASSETS:

a.

Identified intangible assets

Intangible assets consisted of the following:

						December 31, 2024
		Cost				Accumulated amortization				Currency translation adjustment				Net
Exclusivity right		$	951			$	(951	)		$	-			$	-
Technology			9,500				(5,329	)			(582	)			3,589
Customer relationships			16,300				(3,051	)			(1,168	)			12,081
IP*			4,500				(852	)			-				3,648
Total identified intangible assets		$	31,251			$	(10,183	)		$	(1,750	)		$	19,318

						December 31, 2023
		Cost				Accumulated amortization				Currency translation adjustment				Net
Exclusivity right		$	951			$	(951	)		$	-			$	-
Technology			9,500				(3,487	)			(315	)			5,698
Customer relationships			16,300				(1,994	)			(389	)			13,917
IP*			4,500				(208	)			-				4,292
Total identified intangible assets		$	31,251			$	(6,640	)		$	(704	)		$	23,907

(*)

On February 28, 2023, the Company entered into a Patent Assignment and Technology Information Disclosure Agreement with Resonac Corporation (“REC”). Pursuant to the agreement, the Company acquired specific Suspended Particle Device (“SPD”) film patents from REC and obtained knowhow of REC’s technical and business information related to SPD film for a total consideration of $4.5 million. The Company paid REC the consideration in two payments until September 2023. The acquired technology is accounted for as an IP intangible asset, amortized over a period of 7 years starting in September 2023.

Amortization expenses recorded for identified intangible assets in the Consolidated Statements of Operations for each period and were as follows:

		For the year ended December 31,
		2024				2023
Exclusivity right		$	-			$	99
Technology			1,842				1,842
Customer relationships			1,057				1,053
IP*			644				208
Total amortization expenses		$	3,543			$	3,202

(*)

In 2024, an amount of $161 was capitalized to inventory and included in the cost of revenues.

Future amortization expenses are expected to be as follows:

		2025				2026				2027				2028				2029				Thereafter				Total
Future amortization expenses			3,376				3,376				1,766				1,643				1,643				7,514				19,318

b.

Goodwill

Following the separation of the architecture and automotive segment into the two operating segments (see Note 4), the Company reallocated goodwill to its reorganized reporting units using a relative fair value approach. The Company performed an impairment analysis for these two reporting units upon reallocation. Based on the Company’s assessment as of date of the change in the reporting units, and December 31, 2024, its annual impairment assessment date, it was concluded that the fair value of each of the architecture and automotive reporting units exceeded its carrying amount and therefore no goodwill impairment was required.

The changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 were as follows:

		Aeronautics				Architecture				Automotive				Safety tech				Total

Balance as of December 31, 2022		$	4,958			$	1,382			$	8,764			$	5,676			$	20,780
Changes during the period:
Translation differences			184				60				315				211				770
Balance as of December 31, 2023		$	5,142			$	1,442			$	9,079			$	5,887			$	21,550
Changes during the period:
Translation differences			(303	)			(85	)			(534	)			(346	)			(1,268	)
Balance as of December 31, 2024		$	4,839			$	1,357			$	8,545			$	5,541				20,282

The Company operates its business through four reporting segments: Aeronautics, Architecture, Automotive and Safety tech. See Note 4 for additional segment information.

The Company determines the fair value of its reporting units using the income approach. According to the income approach, the Company uses discounted cash flows to estimate the fair value. Cash flow projections are based on the Company’s estimates of revenue growth rates and operating margins, taking into consideration the industry’s and market’s conditions. The discount rate used is based on the weighted average cost of capital (“WACC”), adjusted for the relevant risk associated with country-specific and business-specific characteristics.

As of December 31, 2024, the Company performed a quantitative assessment of the reporting units’ fair value. No impairment charges were recognized as of December 31, 2024. This, based on the following assumptions:

		Aeronautics				Architecture				Automotive				Safety tech
Discount rate			19	%			19	%			19	%			19	%
Terminal growth rate			3	%			3	%			3	%			3	%

If business conditions or expectations were to change materially, it may be necessary to record impairment charges to the Company’s reporting units in the future.