XML 187 R19.htm IDEA: XBRL DOCUMENT
v3.24.3

GOODWILL | 12 Months Ended
--- | ---
Dec. 31, 2023
Disclosure Goodwill Abstract |
GOODWILL | 12. GOODWILL The following table summarizes the changes in the Company’s goodwill for the years ended December 31, 2023 and 2022:
Schedule of goodwill |  |  |  |
|  | Goodwill |
Balance as of January 1, 2022 |  | $ | 10,090,000 |
Acquisition of AVLP |  |  | 18,570,000 |
Acquisition of SMC |  |  | 3,184,000 |
Acquisition of GIGA |  |  | 9,881,000 |
Impairment of goodwill |  |  | (13,064,000 | )
Effect of exchange rate changes |  |  | (759,000 | )
Balance as of December 31, 2022 |  |  | 27,902,000 |
Impairment of goodwill |  |  | (21,387,000 | )
Effect of exchange rate changes |  |  | (427,000 | )
Balance as of December 31, 2023 |  | $ | 6,088,000 |
During the year ended December 31, 2023, the Company recognized $18.6 million and $3.2 million in impairment of goodwill related to AVLP and Microphase, respectively. During the year ended December 31, 2022, the Company recognized $3.2 million and $9.9 million impairment of goodwill related to SMC and GIGA, respectively. Impairment of AVLP Goodwill The Company tests the recorded amount of goodwill for impairment on an annual basis on December 31 or more frequently if there are indicators that the carrying amount of the goodwill exceeds its carried value. The Company performed a goodwill impairment test as of June 30, 2023 related to AVLP as there were indicators of impairment related to certain unforeseen business developments and changes in financial projections. The valuation of AVLP was determined using an income approach methodology of valuation. The income approach is based on the projected cash flows discounted to their present value using discount rates, that in the Company’s judgment, consider the timing and risk of the forecasted cash flows using internally developed forecasts and assumptions. Under the income approach, the discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics. The analysis included assumptions regarding AVLP’s revenue forecast and discount rates of 26.7% using a weighted average cost of capital analysis. The market approach was also considered; however, the income approach was chosen as the Company determined it was a better representation of AVLP’s projected long-term performance. The results of the quantitative test indicated the fair value of the AVLP reporting unit did not exceed its carrying amounts, including goodwill, in excess of the carrying value of the goodwill. As a result, the entire $18.6 million carrying amount of AVLP’s goodwill was recognized as a non-cash impairment charge during the year ended December 31, 2023. Impairment of Microphase Goodwill During the fourth quarter of 2023, Microphase experienced a significant decline in sales and, as a result, the Company performed a goodwill impairment test as of December 31, 2023. The valuation of Microphase was determined using an income approach methodology of valuation. The income approach is based on the projected cash flows discounted to their present value using discount rates, that in the Company’s judgment, consider the timing and risk of the forecasted cash flows using internally developed forecasts and assumptions. The market approach was also considered; however, the income approach was chosen as the Company determined it was a better representation of Microphase’s projected long-term performance. The results of the quantitative test indicated the fair value of the Microphase reporting unit did not exceed its carrying amounts, including goodwill, in excess of the carrying value of the goodwill. As a result, the entire $3.2 million carrying amount of Microphase’s goodwill was recognized as a non-cash impairment charge during the year ended December 31, 2023. Impairment of SMC Goodwill During the fourth quarter of 2022, SMC experienced adverse changes in business climate, a significant decline in sales and a drop in the trading price of its common stock. Due to these factors, the Company determined that a triggering event had occurred, and therefore, performed a goodwill impairment assessment as of December 31, 2022. The valuation of the SMC reporting units was determined using a market approach with observable inputs, primarily based on the trading price of SMC’s common stock plus an estimated control premium of approximately 20%. The results of the quantitative test indicated the fair value of the SMC reporting unit did not exceed its carrying amounts, including goodwill, in excess of the carrying value of the goodwill. As a result, the entire $3.2 million carrying amount of SMC’s goodwill was recognized as a non-cash impairment charge during the year ended December 31, 2022. Impairment of GIGA Goodwill During the fourth quarter of 2022, GIGA experienced a significant decline in sales and a drop in the trading price of its common stock. Due to these factors, the Company determined that a triggering event had occurred, and therefore, performed a goodwill impairment assessment as of December 31, 2022. The valuation of the GIGA reporting units was determined using an income approach methodology of valuation. The income approach is based on the projected cash flows discounted to their present value using discount rates, that in the Company’s judgment, consider the timing and risk of the forecasted cash flows using internally developed forecasts and assumptions. Under the income approach, the discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics. The analysis included assumptions regarding GIGA’s revenue forecast, with negligible or declining growth rates and discount rates of 17.5% using a weighted average cost of capital analysis. The market approach was also considered; however, the income approach was chosen as the Company determined it was a better representation of GIGA’s projected long-term performance. The results of the quantitative test indicated the fair value of the GIGA reporting unit did not exceed its carrying amounts, including goodwill, in excess of the carrying value of the goodwill. As a result, the entire $9.9 million carrying amount of GIGA’s goodwill was recognized as a non-cash impairment charge during the year ended December 31, 2022.

X
- References No definition available. + Details
Name: | gpus_DisclosureGoodwillAbstract
Namespace Prefix: | gpus_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | gpus_GoodwillTextBlock
Namespace Prefix: | gpus_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration