FTC Solar, Inc. Goodwill & Intangibles Disclosure
Note 10. Intangible assets, net and goodwill
Intangible assets consisted of the following:
(in thousands) |
|
Estimated Useful Lives (Years) |
|
December 31, 2024 |
|
|
December 31, 2023 |
|
||
Developed technology |
|
2.5 – 3.0 |
|
$ |
2,014 |
|
|
$ |
2,555 |
|
Total |
|
|
|
|
2,014 |
|
|
|
2,555 |
|
Accumulated amortization |
|
|
|
|
(2,014 |
) |
|
|
(2,013 |
) |
Intangible assets, net |
|
|
|
$ |
— |
|
|
$ |
542 |
|
On January 13, 2017, we entered into an asset purchase agreement with SunEdison Utility Holdings, Inc. ("Seller") to purchase all assets and liabilities of the Seller. The assets purchased as part of this acquisition included $1.2 million of developed technology in the form of software tools for the AP90 tracker, a first-generation tracker based on a 1P linked-row design. The developed technology for the AP90 tracker was amortized over a 3-year period. A portion of this fully amortized developed technology, relating to our Atlas software platform, was sold to a third party as described further in Note 3, "Sale of Atlas software platform" above.
On June 14, 2022, we acquired the outstanding stock of Shanghai Han Xiang New Energy Technology Co. Ltd. ("HX Tracker"), a China-based supplier of tracker systems. In connection with that acquisition, we identified nearly $1.4 million of developed technology in connection with the Helios 1P tracker system, which we amortized over a 2.5-year period on a straight-line basis ending on December 31, 2024.
Amortization expense recognized for the years ended December 31, 2024 and 2023 totaled $0.5 million in each respective year.
Activity in our goodwill balance arising largely from the acquisition of HX Tracker was as follows:
|
|
|
|
Year ended December 31, |
|
|||||
(in thousands) |
|
|
|
2024 |
|
|
2023 |
|
||
Balance at beginning of period |
|
|
|
$ |
7,353 |
|
|
$ |
7,538 |
|
Translation |
|
|
|
|
(214 |
) |
|
|
(185 |
) |
Balance at end of period |
|
|
|
$ |
7,139 |
|
|
$ |
7,353 |
|
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.