Note 4 - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE

4.

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

We evaluate the value of our goodwill annually as of

October 1

st

or more frequently such as when events or changes in circumstances indicate there

may

be an impairment. We test for impairment at the reporting unit level, which we had

two

reporting unit as of

December 31, 2019 (

Devicix and EMS) and

one

reporting unit (Nortech) at

December 31, 2020.

All of our goodwill was derived from our acquisition of the Devicix business in

2015

which was fully consolidated and managed in our Nortech (EMS) reporting unit as of

October 1, 2020.

We determined that we had a single reporting unit at

October 1, 2020

as a result of fully integrating our former Devicix acquisition into our EMS operations which included consolidating the financial reporting and management decision making to the single reporting unit and operating as a single business. As a result, we tested goodwill for impairment at the Nortech reporting unit as of

October 1, 2020.

In determining the nonrecurring fair value measurements of goodwill, we utilized a discounted cash flow approach. Our discounted cash flow model includes assumptions related to our product revenue, gross margins, operating margins and other assumptions along with a weighted average cost of capital that is a combination of the risk free rate coupled with our company specific risk premium.

In our goodwill impairment test as of

October 1, 2020,

we concluded that goodwill was impaired due to a significant reduction of results from operations during the

fourth

quarter of

2020

that was more than expected suggesting a greater impact of the COVID-

19

pandemic and took a

$2,375

impairment loss, which fully impaired our remaining goodwill. We determined there was

no

impairment of goodwill during the year ended

December 31, 2019.

The cumulative goodwill impairment loss is

$3,283

and

$908

as of

December 31, 2020

and

2019,

respectively.

Other Intangible Assets

Finite life intangible assets at

December 31, 2020

and

2019

are as follows:

	December 31, 2020
			Gross		Accumulated		Net Book
			Carrying		Amortization		Value
	Years		Amount		Amount		Amount
Customer Relationships		9	$	1,302	$	795	$	507
Intellectual Property		3		100		100		-
Trade Names		20		814		225		589
Other		7		77		-		77
Totals			$	2,293	$	1,120	$	1,173

	December 31, 2019
			Gross		Accumulated		Net Book
			Carrying		Amortization		Value
	Years		Amount		Amount		Amount
Customer Relationships		9	$	1,302	$	651	$	651
Intellectual Property		3		100		95		5
Trade Names		20		814		183		631
Other		7		56		-		56
Totals			$	2,272	$	929	$	1,343

Amortization of finite life intangible assets was

$191

and

$219

for the years ended

December 31, 2020

and

2019,

respectively.

Estimated future annual amortization expense (except projects in process) related to these assets is approximately as follows:

Year	Amount
2021	$	185
2022		185
2023		185
2024		113
2025		41
Thereafter		387
Total	$	1,096

In the

fourth

quarter of

2020,

we evaluated that there was a trigger event, largely driven by the ongoing impact of COVID-

19,

that indicated that the carrying amount of our long-lived assets

may

not

be recoverable. We performed the recoverability test of our undiscounted cash flow forecast over the life of our primary asset and determined there was

no

impairment. We completed our qualitative assessment of our long lived assets as of

December 31, 2019

and concluded it is more likely than

not

that our finite-lived intangible and other long lived assets were

not

impaired.