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Note 3 - Intangible Assets, Net

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

3. Intangible assets, net

Intangible assets, net, other than goodwill, consist of the following:

		*Amortization period (in years)*				*June 30, 2024*				*December 31, 2023*
Gross amount:
Software developed for internal use			3			$	22,802				20,175
Acquired proprietary technology			3-5				15,792				16,972
Customer relationships			5-10				36,686				39,168
Trade names			4-20				16,657				16,657
Domain names			20				195				195
Databases			5-10				31,292				31,292
Non-competition agreements			2-5				1,768				1,768
Total gross amount							125,192				126,227

Accumulated amortization:
Software developed for internal use							(14,293	)			(12,142	)
Acquired proprietary technology							(14,848	)			(15,132	)
Customer relationships							(35,647	)			(37,249	)
Trade names							(7,302	)			(6,893	)
Domain names							(82	)			(77	)
Databases							(27,482	)			(26,157	)
Non-competition agreements							(1,768	)			(1,768	)
Total accumulated amortization							(101,422	)			(99,418	)
Net intangible assets:
Software developed for internal use							8,509				8,033
Acquired proprietary technology							944				1,840
Customer relationships							1,039				1,919
Trade names							9,355				9,764
Domain names							113				118
Databases							3,810				5,135
Total intangible assets, net						$	23,770			$	26,809

The gross amounts associated with software developed for internal use primarily represent capitalized costs of internally developed software. The amounts relating to acquired proprietary technology, customer relationships, trade names, domain names, databases, and non-competition agreements primarily represent the fair values of intangible assets acquired as a result of the acquisition of Fluent, LLC, effective December 8, 2015; the acquisition of Q Interactive, LLC, effective June 8, 2016; the acquisition of substantially all the assets of AdParlor Holdings, Inc. and certain of its affiliates, effective July 1, 2019 (the "AdParlor Acquisition"); the acquisition of a 50% interest in Winopoly, LLC, effective April 1, 2020; the acquisition of a 100% interest in True North Loyalty, LLC, (the "True North Acquisition"), effective January 1, 2022 (see Note 11, Variable Interest Entity); and the consolidation of TAPP Influencers Corp. ("TAPP") effective January 9, 2023 (see Note 11, Variable Interest Entity).

During the second quarter of 2024, the Company determined that the effects of the expected decline in operations due to the impact of certain client relationships constituted a triggering event for the All Other reporting unit. The Company conducted an interim test of recoverability of its long-lived assets, which compared the projected undiscounted cash flows to the carrying value of the asset group. The results of this approach indicated that this long-lived asset was not recoverable and an impairment loss related to its customer relationships was to be calculated. The Company determined that based on the facts and circumstances, the remaining balance was impaired and recorded a non-cash impairment charge of its customer relationship intangible of $383 as of June 30, 2024.

As of June 30, 2024, the Company had recorded a $597 impairment charge on its software developed for internal use which related to an immaterial business unit under the Fluent reporting unit that had met the held for sale criteria as of June 30, 2024.

FLUENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Amounts in thousands, except share and per share data)

(unaudited)

Amortization expenses of $2,495 and $2,995 for the three months ended June 30, 2024 and 2023, respectively, and $4,978 and $5,251 for the six months ended June 30, 2024 and 2023, respectively, are included in depreciation and amortization expenses in the consolidated statements of operations. As of June 30, 2024, intangible assets with a carrying amount of $653, included in the gross amount of software developed for internal use, have not commenced amortization, as they are not ready for their intended use.

As of June 30, 2024, estimated amortization expenses related to the Company's intangible assets for the remainder of 2024 and through 2029 and thereafter are as follows:

Year		*June 30, 2024*
Remainder of 2024		$	3,650
2025			6,858
2026			4,255
2027			2,435
2028			828
2029 and thereafter			5,744
Total		$	23,770