Note 4 - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2021

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 one reporting unit (Nortech) at December 31, 2020.

We tested goodwill for impairment as of October 1, 2020 and 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. We recorded a $2,375 impairment loss, which fully impaired our remaining goodwill.

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.

Other Intangible Assets

Finite life intangible assets at December 31, 2021 and 2020 are as follows:

	Customer Relationships		Intellectual Property		Trade Names		Patents		Total
Balance at January 1, 2020	$	651	$	5	$	631	$	56	$	1,343
Additions		-		-		-		21		21
Amortization		144		5		42		-		191
Balance at December 31, 2020	$	507	$	-	$	589	$	77	$	1,173
Additions		-		-		-		64		64
Amortization		147		-		29		-		176
Abandonment Loss		-		-		560		-		560
Balance at December 31, 2021	$	360	$	-	$	-	$	141	$	501

In 2021, we determined the fair value of the Devicix tradename was more likely than not at $0 based on management’s best estimate and recognized a $560 loss on abandonment of intangible assets.

Intangible assets are amortized on a straight-line basis over their estimated useful lives. The weighted average remaining amortization period of our intangible assets is 3.0 years. Patents are not being amortized as they are in process and a patent has not yet been received.

Amortization expense of finite life intangible assets was $176 and $191 for the years ended December 31, 2021 and 2020, respectively.

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

Year	Amount
2022	$	145
2023		145
2024		71
Total	$	361

We completed our qualitative assessment of our long-lived assets as of December 31, 2021 and conclude it is more likely than not that our finite-lived intangible and other long-lived assets were not impaired. 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.