Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  



During the year ended December 31, 2023, the Company considered the decline in its stock price to be an indicator of impairment and, accordingly, performed a quantitative impairment assessment of its goodwill and intangible assets. This assessment involved comparing the estimated fair value of each of its reporting units to the reporting unit’s carrying value, inclusive of the goodwill balance allocated to the reporting unit.


Estimation of the fair value of each reporting unit involved the projection of discounted future cash flows using certain assumptions that are subjective in nature, including assumptions related to historical and market growth rates and gross margin improvements, as well as future operating expense synergies and optimization, among other factors. Based on its analysis, the Company determined that the carrying value exceeded the estimated fair value as of December 31, 2023 in all reporting units. Consequently, the Company recognized a goodwill impairment charge of $89,087 in the consolidated statements of operations during the year ended December 31, 2023.


The fair value measurements used in the evaluation described above are considered to be Level 3 valuations within the fair value hierarchy, as the measurements involve projections of discounted future cash flows, which are derived from unobservable assumptions, the most subjective of which are the discount rates for each respective reporting unit. The discount rate used in for all reporting units ranged from 20% to 22.5%.


Changes in goodwill during the years ended December 31, 2023 and 2022 were as follows:


    2023     2022  
Beginning balance January 1,   $ 203,710     $ 19,390  
Acquisition of Electric Blue     -       10,443  
Acquisition of SemaConnect     -       174,439  
Acquisition of Envoy     30,118       -  
Impairment of goodwill     (89,087 )     -  
Effect of translation adjustments     140       (562 )
Ending balance December 31,   $ 144,881     $ 203,710  





Notes to Consolidated Financial Statements

(in thousands, except for share and per share amounts)