Note 7 - Intangible Assets Including Goodwill

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 7: INTANGIBLE ASSETS, INCLUDING GOODWILL

Intangible Assets

Intangible assets consisted of the following at  June 30, 2023 and December 31, 2022:

	June 30,				December 31,
	2023				2022
	Gross				Gross
	Carrying		Accumulated		Carrying		Accumulated
	Amount		Amortization		Amount		Amortization
Technology platform	$	9,765	$	4,737	$	9,765	$	4,354
Purchased and developed software		5,336		3,748		4,682		3,375
In-Process internally developed software platform		5,112		-		4,074		-
Customer relationships		15,000		3,497		15,000		2,849
Trademarks and trade names		1,600		904		1,600		808
Non-compete		30		21		30		13
		36,843		12,907		35,151		11,399
Accumulated amortization		12,907				11,399
Net book value of amortizable intangible assets	$	23,936			$	23,752

For the three months ended June 30, 2023 and 2022, amortization of intangible assets charged to operations was $755 and $431, respectively. For the six months ended June 30, 2023 and 2022 amortization of intangible assets charged to operations was $1,508 and $1,111, 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 at  September 30th each fiscal year, when an event occurs, or circumstances change that would indicate potential impairment. The Company has only one reporting unit, and therefore the entire goodwill is allocated to that reporting unit.

The Company assessed the carrying value of goodwill at the reporting unit level based on an estimate of the fair value of its reporting unit. Fair value of the reporting unit was estimated using both (1) a market approach, leveraging recent industry merger and acquisition activity as well as comparable public company information, and (2) a discounted cash flow analyses consisting of various assumptions, including expectations of future cash flows based on projections or forecasts derived from analysis of business prospects and economic or market trends that may occur, specifically, the Company gave significant consideration to actual historic financial results, including revenue growth rates in the current and preceding three years, further informed by known backlog and customer acquisitions. Based on the Company’s assessment, we determined that the fair value of our reporting unit exceeds its carrying value, and accordingly, the goodwill associated with the reporting unit is not considered to be impaired at September 30, 2022.

At December 31, 2022, we concluded the decline in our market value represented an interim indicator of potential impairment.  Based on a quantitative assessment of our fair value performed at December 31, 2022, using the same approach as our annual impairment performed at September 30, described above, we concluded that the carrying value of our goodwill did not exceed the reporting unit fair value. No indicators of impairment were identified as of June 30, 2023. The Company recognizes that any differences between our actual and projected future results, or changes in our projected future results, could potentially have a material impact on our assessment of goodwill impairment. The Company will continue to monitor the actual performance of its operations against expectations and assess further indicators of possible impairment. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity. Should any indicators of impairment occur in subsequent periods, the Company will be required to perform an analysis in order to determine whether goodwill is impaired.