Note 7 - Acquired Intangible Assets, Net

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

7. Acquired Intangible Assets, Net

Intangible assets consist of the following:

			Year Ended December 31, 2021
	Gross Value		Less: Accumulated Currency Translation Adjustment			Less: Current Period Impairment Charge			Less: Accumulated Amortization			Net Book Value		Weighted Average Useful Life
Developed technology	$	89,580	$	(1,608	)	$	-		$	(17,891	)	$	70,081		15
IPR&D		3,256		(1,006	)		(600	)		-			1,650	Indefinite
Customer relationships		9,000		-			-			(1,727	)		7,273		10
Distributor relationships		4,700		(415	)		-			(4,285	)		-		5
Patents		1,000		(189	)		-			(632	)		179		16
Tradenames		5,200		-			-			(2,001	)		3,199		5
Total	$	112,736	$	(3,218	)	$	(600	)	$	(26,536	)	$	82,382		13

			Year Ended December 31, 2020
	Gross Value		Less: Accumulated Currency Translation Adjustment			Less: Current Period Impairment Charge			Less: Accumulated Amortization			Net Book Value		Weighted Average Useful Life
Developed technology	$	93,953	$	(2,648	)	$	(1,025	)	$	(14,381	)	$	75,899		15
IPR&D		5,006		(1,005	)		(1,414	)		-			2,587	Indefinite
Customer relationships		9,000		-			-			(827	)		8,173		10
Distributor relationships		4,700		(415	)		-			(4,285	)		-		5
Patents		1,000		(159	)		-			(582	)		259		16
Tradenames		5,200		-			-			(961	)		4,239		5
Total	$	118,859	$	(4,227	)	$	(2,439	)	$	(21,036	)	$	91,157		13

Total amortization expense with respect to the definite-lived acquired intangible assets was $7.8 million, $7.4 million and $1.0 million for the years ended December 31, 2021, 2020, and 2019.

During the fourth quarter of 2021, the Company decided not to further invest in a joint technology IPR&D project, as it is no longer aligned with the Company’s core strategic focus. As a result, the Company recorded an impairment charge in the amount of $0.6 million in research and development expenses in the Company’s consolidated statements of operations.

During the fourth quarter of 2020, the Company decided not to further invest in its Hyalobone and Hyalonect IPR&D projects as they were no longer aligned with the Company’s core strategic focus. As a result, the Company recorded an impairment charge in the period totaling $1.4 million recorded in research and development expenses in the Company’s consolidated statements of operations.

The Company performed its annual assessment of the remaining IPR&D intangible asset as of November 30, 2021. The Company estimated the fair value of the IPR&D intangible assets using the income approach which is based on the Multi-Period Excess Earnings Method (“MPEEM”). MPEEM measures economic benefit indirectly by calculating the income attributable to an asset after appropriate returns are paid to complementary assets used in conjunction with the subject asset to produce the earnings associated with the subject asset, commonly referred to as contributory asset charges. This approach incorporates significant estimates and assumptions related to the forecasted results including revenues, expenses, expected economic life of the asset, contributory asset charges and discount rates to estimate future cash flows. While assumptions utilized are subject to a high degree of judgment and complexity, the Company made its best estimate of future cash flows under a high degree of economic uncertainty that existed as of November 30, 2021. In developing its assumptions, the Company also considered observed trends of its industry participants. No impairment existed as the estimated fair value of the remaining IPR&D intangible asset was greater than its carrying value.

During 2020, the Company determined that it would not pursue CE Mark renewals for certain of its legacy products, which resulted in an impairment of certain developed technology related assets in the amount of $1.0 million in 2020. During 2019, the Company recorded $0.4 million of impairments, including a $0.3 million impairment charge for the Hyalospine developed technology asset as the Company made the decision not to renew its CE Mark as the product was not aligned with the Company’s core strategic focus. The impairment charges in 2020 and 2019 were recorded in selling, general and administrative expenses on the Company’s consolidated statements of operations.