Intangible Assets

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of intangible assets is measured by a comparison of the carrying amount of an asset group to its future undiscounted cash flows. If these comparisons indicate that an asset group is not recoverable, the Company will recognize an impairment loss for the amount by which the carrying value of the asset group exceeds its related estimated fair value. The Company has determined that the assets within each of the Company's reporting units (Mobile Broadband (MBB) and KVH Media Group (Media)) are highly interrelated and interdependent on each other to generate revenues, and thus independent cash flows are not identifiable at a level lower than that of these reporting units. Accordingly, the Company's asset groups were determined to be its reporting units (MBB and Media).

The changes in the carrying amount of intangible assets during the three months ended March 31, 2024 are as follows:


	Amounts
Balance at December 31, 2023	$	1,194
Amortization expense	(100)
Intangible assets acquired in asset acquisition	10

Foreign currency translation adjustment	1
Balance at March 31, 2024	$	1,105

Intangible assets arose from the purchase of distribution rights from Kognitive Networks Inc. and the purchase of KVH Industries Norway AS. The assets related to the distribution rights with Kognitive Networks are being amortized on a straight-line basis over the estimated useful life of 3 years. The assets related to the purchase of KVH Industries Norway AS for acquired intellectual property are fully amortized.

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. 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. The amounts payable under the contingent consideration arrangement, if any, will be included in the measurement of the cost of the acquired subscriber relationships.

Acquired intangible assets are subject to amortization. The following table summarizes acquired intangible assets at March 31, 2024 and December 31, 2023, respectively:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
March 31, 2024
Subscriber relationships	$	21	$	2	$	19
Distribution rights	1,250		164		1,086


Intellectual property	2,284		2,284		—

	$	3,555	$	2,450	$	1,105
December 31, 2023
Subscriber relationships	$	11	$	1	$	10
Distribution rights	1,250		66		1,184


Intellectual property	2,284		2,284		—

	$	3,545	$	2,351	$	1,194

Amortization expense related to intangible assets was $100 and $93 for the three months ended March 31, 2024 and 2023, respectively. Amortization expense was categorized as general and administrative expense.

As of March 31, 2024, the total weighted average remaining useful lives of the definite-lived intangible assets was 3.0.

Estimated future amortization expense for intangible assets recorded by the Company at March 31, 2024 is as follows:


Years ending December 31,	Amortization Expense
2024	$	301
2025	402
2026	402
Total amortization expense	$	1,105