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Intangible Assets, Including Goodwill

6 Months Ended

Jun. 30, 2022

Intangible Assets, Including Goodwill [Abstract]

NOTE 8: INTANGIBLE ASSETS, INCLUDING GOODWILL

Intangible Assets

Intangible assets consisted of the following at June 30, 2022 and December 31, 2021:

	June 30, 2022				December 31, 2021
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Technology platform	$	9,765		3,908	$	4,635		3,652
Purchased and developed software		4,108		3,029		3,488		2,713
In-Process internally developed software platform		2,532		-		824		-
Customer relationships		15,000		2,153		3,960		1,692
Non-compete		30		6		-		-
Trademarks and trade names		1,600		712		640		640
		33,035		9,808		13,547		8,697
Accumulated amortization		9,808				8,697
Net book value of amortizable intangible assets	$	23,227			$	4,850

On February 17, 2022, the Company added intangible assets as a result of accounting for the Merger in accordance with ASC 805 Business Combinations, as outlined in Note 5 Business Combinations. The resulting amortization expense charged to operations during the three months ended March 31, 2022 was $680. Both the intangible assets and the related amortization expense related to the Merger which were recorded during the three months ended March 31, 2022 represented estimates.

For the three months ended June 30, 2022 and 2021, amortization of intangible assets charged to operations was $431 and $139, respectively. For the six months ended June 30, 2022 and 2021 amortization of intangible assets charged to operations was $1,111 and $279, respectively.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired. Goodwill is subject to an impairment review at a reporting unit level, on an annual basis as of the end of September of each fiscal year, or when an event occurs, or circumstances change that would indicate potential impairment. Following the Merger, the Company evaluated its reporting units in accordance with ASC 280 Segment Reporting and concluded that the Company has only one reporting unit. Therefore, the entire goodwill is allocated to that reporting unit.

While the Company completes its annual assessment of impairment as of September 30, we evaluate qualitative indicators during other interim periods that may be indicative of impairment and require further quantitative assessments. During the three and six months ended June 30, 2022, the Company experienced a significant decline in its common share price and overall market capitalization, which is below book value as of June 30, 2022. We deemed this decline in market capitalization to be an indicator of a potential impairment of the Company’s recorded investment in its intangible assets and goodwill. We evaluated certain facts and circumstances which management believes are responsible for the disparity between our market capitalization and the book value of our equity as of June 30, 2022.

While our overall business performance has been consistent with our expectations both before and after the acquisition of Reflect, we believe a significant portion of the decline in our market price relates primarily to several macroeconomic factors including: (1) market wide recessionary fears, (2) rapid inflation fears, which often have an outsized, direct negative impact on the share price of high-growth companies with limited or negative cash flow from operations, (3) a lack of comprehension by the markets of the recent Merger with Reflect and related financing transaction, and (4) the sale of over 7,000,000 shares of our common stock into the market by a new investor, resulting in significant negative volume and price pressure on the stock unrelated to the Company fundamentals. We do not believe these factors are consistent with or reflective of the underlying value of the business, and there were no other indicators of potential impairment as of June 30, 2022. Should our market price remain at this level for an extended period of time, there could be potential future impairment.

Based on the relatively recent decline in our share price and market capitalization, along with improving Company fundamentals following our Merger with Reflect and a share price that was substantially higher upon announcing that Merger mere months ago, we believe our implied fair value continues to exceed our total carrying value. There were no other indications of impairment as of June 30, 2022.