Goodwill and Intangible Assets

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table sets forth the changes in the carrying amount of goodwill for the three months ended March 31, 2023:


	Amounts
Balance at December 31, 2022	$	5,308

Foreign currency translation adjustment	21
Balance at March 31, 2023	$	5,329

Intangible Assets

The changes in the carrying amount of intangible assets during the three months ended March 31, 2023 are as follows:


	Amounts
Balance at December 31, 2022	$	404
Amortization expense	(93)
Intangible assets acquired in asset acquisition	12

Foreign currency translation adjustment	2
Balance at March 31, 2023	$	325

Intangible assets arose from the acquisition of KVH Media Group (acquired as Headland Media Limited) in May 2013. These intangible assets are being amortized on a straight-line basis over the estimated useful life of 10 years for acquired subscriber relationships. The intangible assets were recorded in pounds sterling and fluctuations in exchange rates cause these amounts to increase or decrease from time to time.

In January 2017, the Company completed the acquisition of certain subscriber relationships from a third party. This acquisition did not meet the definition of a business under ASC 2017-01, Business Combinations (Topic 805)-Clarifying the Definition of a Business, which the Company adopted on October 1, 2016. The Company ascribed $100 of the initial purchase price to the acquired subscriber relationships definite-lived intangible assets with an initial estimated useful life of 10 years. Under the asset purchase agreement, the purchase price includes a component of contingent consideration under which the Company is required to pay a percentage of recurring revenues received from the acquired subscriber relationships through 2026 up to a maximum annual payment of $114. As of March 31, 2023, the carrying value of the intangible assets acquired in the asset acquisition was $474. As the acquisition did not represent a business combination, the contingent consideration arrangement is recognized only when the contingency is resolved and the consideration is paid or becomes payable. The amounts payable under the contingent consideration arrangement, if any, will be included in the measurement of the cost of the acquired subscriber relationships. An additional $12 and $14 of consideration was earned under the contingent consideration arrangement during the three months ended March 31, 2023 and 2022, respectively.

Acquired intangible assets are subject to amortization. The following table summarizes acquired intangible assets at March 31, 2023 and December 31, 2022, respectively:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
March 31, 2023
Subscriber relationships	$	7,663	$	7,338	$	325
Distribution rights	315		315		—
Internally developed software	446		446		—
Proprietary content	153		153		—
Intellectual property	2,284		2,284		—

	$	10,861	$	10,536	$	325
December 31, 2022
Subscriber relationships	$	7,649	$	7,245	$	404
Distribution rights	315		315		—
Internally developed software	446		446		—
Proprietary content	153		153		—
Intellectual property	2,284		2,284		—

	$	10,847	$	10,443	$	404

Amortization expense related to intangible assets was $93 and $194 for the three months ended March 31, 2023 and 2022, respectively. Amortization expense was categorized as general and administrative expense.

As of March 31, 2023, the total weighted average remaining useful lives of the definite-lived intangible assets was 0.5 years.

Estimated future amortization expense remaining at March 31, 2023 for intangible assets acquired was as follows:

Years ending December 31,


Remainder of 2023	$	91
2024	75
2025	75
2026	75
2027	6
2028 and thereafter	3
Total future amortization expense	$	325

For definite-lived intangible assets, the Company assesses the carrying value of these assets whenever events or circumstances indicate that the carrying value may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset, or asset group, to the future undiscounted cash flows expected to be generated by the asset, or asset group. There were no events or changes in circumstances during the three months ended March 31, 2023 which indicated that an assessment of the impairment of goodwill and intangible assets was required.