Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

Goodwill

Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired.

Goodwill is tested annually for impairment at the reporting unit level during the fourth quarter or upon the occurrence of certain events or substantive changes in circumstances. The Company identified an indicator of goodwill impairment in the three and nine months ended September 30, 2023. The balance of the Company’s goodwill was $40.2 million as of September 30, 2023 and $37.5 million as of December 31, 2022.

Goodwill Impairment

The Company assessed the current and future economic outlook as of September 30, 2023 for its single reporting unit and the Company experienced a sustained decrease in its share price, an indicator for impairment of goodwill. The evaluation began with a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit was less than its carrying value. The qualitative assessment did not indicate that it was more likely than not that the fair value exceeded the carrying value, which led to a quantitative assessment.

The Company estimated the fair value of its reporting unit using a combination of the income and market approaches. In performing the goodwill impairment test, the Company used an exit multiple given the development phase of the Company and a discount rate of 16.4% in its estimation of fair value. The evaluation performed resulted in no impairment as of September 30, 2023.

Intangible Assets

The following table presents details of the Company’s intangible assets as of September 30, 2023 ($ in thousands):

	September 30, 2023
	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net Carrying Amount		Weighted Average Remaining Useful Life (In Years)
Intangible assets with finite lives:
Acquired and developed technology	$	37,367	$	(17,529)	$	(2,560)	$	17,278	7.4
Customer relationships	25,718		(8,663)		(2,334)		14,721		9.5
Commercialization rights	11,578		(4,180)		—		7,398		5.8
Trademarks and tradenames	5,220		(1,617)		(356)		3,247		9.6
Total intangible assets with finite lives	79,883		(31,989)		(5,250)		42,644
Intangible assets with indefinite lives:
Acquired in-process technology	1,250		—		—		1,250
Favorable license agreement	2,561		—		—		2,561
Total intangible assets with indefinite lives	3,811		—		—		3,811
Total intangible assets	$	83,694	$	(31,989)	$	(5,250)	$	46,455

The following table presents details of the Company’s intangible assets as of December 31, 2022 ($ in thousands):

	December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation		Net Carrying Amount		Weighted Average Remaining Useful Life (In Years)
Intangible assets with finite lives:
Acquired and developed technology	$	35,747	$	(15,138)	$	(2,369)	$	18,240	7.5
Customer relationships	21,898		(7,459)		(2,104)		12,335		9.0
Commercialization rights	11,579		(3,233)		—		8,346		6.6
Trademarks and tradenames	4,540		(1,345)		(315)		2,880		8.5
Total intangible assets with finite lives	73,764		(27,175)		(4,788)		41,801
Acquired in-process technology	1,250		—		—		1,250
Total intangible assets	$	75,014	$	(27,175)	$	(4,788)	$	43,051

Acquisition of Intangible Assets

In January 2023 and July 2023, the Company acquired the intangible assets of HLA Data Systems and MediGO, respectively. The intangible assets are included in Acquired and developed technology, Customer relationships and Trademarks and tradenames as of September 30, 2023.

Amortization of Intangible Assets

Intangible assets are carried at cost less accumulated amortization. Amortization expenses are recorded to cost of testing services, cost of product, cost of patient and digital solutions, and sales and marketing expenses in the condensed consolidated statements of operations.

The following table summarizes the Company’s amortization expense of intangible assets (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Cost of testing services	$	329	$	329	$	987	$	987
Cost of product	408		415		1,242		1,305
Cost of patient and digital solutions	265		237		768		709
Sales and marketing	616		554		1,817		1,702
Total	$	1,618	$	1,535	$	4,814	$	4,703

The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of September 30, 2023 (in thousands):

Years Ending December 31,	Cost of Testing Services		Cost of Product		Cost of Patient and Digital Solutions		Sales and Marketing		Total
Remainder of 2023	$	329	$	405	$	271	$	634	$	1,639
2024	1,316		1,621		850		2,494		6,281
2025	1,316		1,621		681		2,494		6,112
2026	1,316		732		681		2,492		5,221
2027	1,316		732		681		2,478		5,207
Thereafter	2,825		3,260		2,142		9,957		18,184
Total future amortization expense	$	8,418	$	8,371	$	5,306	$	20,549	$	42,644