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Note 12 - Goodwill and Intangible Assets, net

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note 12. Goodwill and Intangible Assets, net

Goodwill

During the year ended December 31, 2024, the Company concluded that the carrying amount of the Healthcare Operations reporting segment exceeded its fair value, resulting in the recognition of a non-cash goodwill impairment charge of approximately $0.7 million. Interim impairment assessments were considered necessary as a result of the sustained decline in the Healthcare Operations stock price and related market capitalization. The goodwill impairment charge is reflected in Impairment loss in the Consolidated Statements of Comprehensive Loss. With the assistance of a third-party valuation firm, the fair value of the Healthcare Operations reporting segment was determined using an income approach whereby the fair value was calculated utilizing discounted estimated future cash flows (level 3 nonrecurring fair value measurement). The income approach requires several assumptions including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, estimation of the long-term rate of growth for the business, estimation of the useful life over which cash flows will occur, and determination of the weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit. The long-term growth rate used in the impairment was 3.0% and the weighted average cost of capital used in the impairment was 13.5%.

The following table reflects changes in the carrying amount of goodwill during the periods presented by reportable segments (in thousands):

		*e-Commerce Operations*				*Healthcare Operations*				*Total*
Goodwill, net as of December 31, 2022		$	—			$	—			$	—

Changes in Goodwill during the year ended December 31, 2023:
Goodwill acquired			—				14,626				14,626
Impairment losses			—				(13,895	)			(13,895	)

Balances as of December 31, 2023
Goodwill			—				14,626				14,626
Accumulated impairment losses			—				(13,895	)			(13,895	)
Goodwill, net as of December 31, 2023			—				731				731

Changes in Goodwill during the year ended December 31, 2024:
Goodwill acquired - Outfitter acquisition			301				—				301
Deferred tax effect of intangible basis difference (1)			(145	)			—
Impairment losses			—				(731	)			(731	)

Balances as of December 31, 2024
Goodwill			156				14,626				14,782
Accumulated impairment losses			—				(14,626	)			(14,626	)
Goodwill, net as of December 31, 2024		$	156			$	—			$	156

(1) Decrease related to book tax difference of intangible assets arising for the business acquisition of Outfitter.

Intangible Assets

During the year ended December 31, 2024, the Company performed an impairment assessment of long-lived assets as it relates to the Healthcare Operations reporting segment due to the decline in future projected revenues and cash flows. As a result, the Company completed a recoverability test and concluded that the asset groups were not fully recoverable as the undiscounted expected future cash flows did not exceed their carrying amounts. The Company, with the assistance of a third-party valuation firm, determined the fair value of the asset groups using an income approach utilizing undiscounted estimated future cash flows (level 3 nonrecurring fair value measurement). The income approach requires several assumptions including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, and estimation of the useful life over which cash flows will occur. The carrying amount of certain assets in the asset group exceeded the fair value, resulting in the recognition of a non-cash impairment charge to intangible assets of approximately $12.8 million for the year ended December 31, 2024 (reflected in Impairment loss in the Consolidated Statements of Comprehensive Loss).

Intangible assets, net consisted of the following (in thousands):

		*December 31, 2024*
		*Gross amount*				*Accumulated amortization*				*Net Amount*
Customer Contracts			665				(312	)			353
Trade names			185				(14	)			171
Total intangible assets		$	850			$	(326	)		$	524

		*December 31, 2023*
		*Gross amount*				*Accumulated amortization*				*Net Amount*
Pharmacy records		$	8,130			$	(807	)		$	7,323
Trade names			4,700				(224	)			4,476
Developed technology			2,880				(281	)			2,599
Customer Contracts			250				(225	)			25
Total intangible assets		$	15,960			$	(1,537	)		$	14,423

A summary of the changes to the gross carrying amount, accumulated amortization, and net book value of total intangible assets by reporting unit during the year ended December 31, 2024 is as follows (in thousands):

		*e-Commerce Operations*				*Healthcare Operations*				*Total*
Balances as December 31, 2023:
Gross amount		$	250			$	15,710			$	15,960
Accumulated amortization			(225	)			(1,312	)			(1,537	)
Net amount			25				14,398				14,423

Changes during the year ended December 31, 2024:
Outfitter acquisition			600				—				600
Accumulated amortization expense			(101	)			(1,608	)			(1,709	)
Impairment - gross amount			—				(15,710	)			(15,710	)
Impairment - accumulated amortization			—				2,920				2,920
Net amount			499				(14,398	)			(13,899	)

Balances at December 31, 2024:
Gross amount			850				—				850
Accumulated amortization			(326	)			—				(326	)
Net amount		$	524			$	—			$	524

For the year ended December 31, 2024 and 2023, the Company recognized amortization expense of approximately $1.7 million and $1.3 million, respectively.

The following table represents the total estimate for future amortization of intangible assets for the five succeeding years and thereafter as of December 31, 2024 (in thousands):

Year			Amount
2025		$	102
2026			102
2027			102
2028			102
2029			39
Thereafter			77
Total		$	524