Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets, Net

v3.22.2.2
Goodwill and Intangible Assets, Net
6 Months Ended
Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, net

Note 8. Goodwill and Intangible Assets, net

A rollforward of goodwill is as follows:

 

 

 

 

 

Balance at December 31, 2021

 

$

1,189,464

 

Measurement period adjustments

 

 

(1,121

)

Goodwill impairment

 

 

(1,066,564

)

Balance at September 30, 2022

 

$

121,779

 

 

As a result of sustained decreases in the Company’s publicly quoted share price, lower market multiples for a relevant peer group, and challenging macroeconomic conditions, the Company concluded there were impairment indicators and conducted a quantitative goodwill impairment assessment, including additional testing of its definite-lived intangibles, and other long-lived assets as of September 30, 2022. As a result of this assessment, the Company did not identify an impairment to its definite-lived intangible assets or other long-lived assets, but the Company recorded a $1,066,564 non-deductible, non-cash goodwill impairment charge (or $19.27 per basic and diluted share) for the three and nine months ended September 30, 2022 in our unaudited consolidated statements of comprehensive income (loss).

 

The Company estimated the fair value of the Company using an equal allocation between the discounted cash flow method under the income approach and the public company guideline method under the market approach. The significant assumptions used in the valuation include revenue growth rates, future gross profit margins and operating expenses used to calculate projected future cash flows, determination of the weighted average cost of capital, and future economic and market conditions. The terminal value is based on an exit revenue multiple which requires significant assumptions regarding the selections of appropriate multiples that consider relevant market trading data. The Company bases its estimates and assumptions on its knowledge of the digital manufacturing industry, recent performance, expectations of future performance and other assumptions the Company believes to be reasonable.

 

Intangible assets, net consisted of the following:

 

 

 

September 30, 2022

 

 

 

December 31, 2021

 

 

 

Gross

 

 

Accumulated Amortization

 

 

Net

 

 

 

Gross

 

 

Accumulated Amortization

 

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade name

 

$

70,000

 

 

$

3,615

 

 

$

66,385

 

 

 

$

70,000

 

 

$

98

 

 

$

69,902

 

Customer relationships

 

 

180,000

 

 

 

7,339

 

 

 

172,661

 

 

 

 

180,000

 

 

 

252

 

 

 

179,748

 

Developed software

 

 

15,700

 

 

 

2,433

 

 

 

13,267

 

 

 

 

15,700

 

 

 

22

 

 

 

15,678

 

Developed technology

 

 

4,300

 

 

 

666

 

 

 

3,634

 

 

 

 

4,300

 

 

 

6

 

 

 

4,294

 

Total intangible assets

 

$

270,000

 

 

$

14,053

 

 

$

255,947

 

 

 

$

270,000

 

 

$

378

 

 

$

269,622

 

 

Aggregate amortization expense related to intangible assets, excluding goodwill which is not amortized, was $4,535 and $2,887 for the three months ended September 30, 2022 and September 30, 2021, respectively, and $13,675 and $7,892 for the nine months ended September 30, 2022 and September 30, 2021, respectively. There are no intangible assets, other than goodwill, with indefinite useful lives.

 

The following table represents the estimated aggregate amortization expense for each of the five succeeding fiscal calendar years.

 

Year

 

Aggregate Amortization

 

Remaining 2022

 

$

4,535

 

2023

 

 

18,140

 

2024

 

 

18,140

 

2025

 

 

18,140

 

2026

 

 

18,041