Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 5 – Goodwill and Intangible Assets

Goodwill

Goodwill consisted of the following:

	Total
Balance at December 31, 2021, before accumulated impairment loses	$	12,948
Accumulated impairment losses		(1,244	)
Balance at December 31, 2021	$	11,704
Balance at December 31, 2022	$	11,704

Goodwill

The Company performed the annual impairment assessment of goodwill for its single reporting unit as of December 31, 2022 and 2021, noting no impairment loss. Considerable management judgment is necessary to evaluate goodwill for impairment. Lifeway estimates fair value using widely accepted valuation techniques including discounted cash flows and market multiples analysis with respect to its single reporting unit. These valuation approaches are dependent upon a number of factors, including estimates of future growth rates, its cost of capital, capital expenditures, income tax rates, and other variables. Assumptions used in the Company’s valuations were consistent with its internal projections and operating plans. Lifeway’s discounted cash flows forecast could be negatively impacted by a change in the competitive landscape, any internal decisions to pursue new or different strategies, a loss of a significant customer, or a significant change in the market place including changes in the prices paid for its products or changes in the size of the market for its products. Additionally, under the market approach analysis, the Company used significant other observable inputs including various guideline company comparisons. Lifeway bases its fair value estimates on assumptions it believes to be reasonable, but which are unpredictable and inherently uncertain. Changes in these estimates or assumptions could materially affect the determination of fair value and the conclusions of the quantitative goodwill test for the Company’s one reporting unit.

Approximately $1,664 of goodwill is deductible for income tax purposes.

Intangible Assets

The gross carrying amounts and accumulated amortization of intangible assets consisted of the following:

	December 31, 2022							December 31, 2021
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Amount		Amortization			Amount		Amount		Amortization			Amount
Recipes	$	44	$	(44	)	$	–	$	44	$	(44	)	$	–
Customer lists and other customer related intangibles		4,529		(4,529	)		–		4,529		(4,529	)		–
Customer relationship		3,385		(1,212	)		2,173		3,385		(1,052	)		2,333
Brand names		7,948		(2,683	)		5,265		7,948		(2,303	)		5,645
Formula		438		(438	)		–		438		(438	)		–
Total intangible assets, net	$	16,344	$	(8,906	)	$	7,438	$	16,344	$	(8,366	)	$	7,978

Estimated amortization expense on intangible assets for the next five years is as follows: 

Year	Amortization
2023	$	540
2024	$	540
2025	$	540
2026	$	540
2027	$	540