XBP Global Holdings, Inc. Goodwill & Intangibles Disclosure

11.     Intangible Assets and Goodwill

Intangible Assets

Intangible assets are stated at the Convenience Date fair values less accumulated amortization as of December 31, 2025 (Successor) and consist of the following:

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Aggregate amortization expense related to intangible assets was $16.2 million and $15.1 million for the periods August 1, 2025 to December 31, 2025 (Successor) and January 1, 2025 to July 31, 2025 (Predecessor), respectively. Aggregate amortization expense related to intangible assets was $34.3 million for the year ended December 31, 2024 (Predecessor).

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Estimated intangibles amortization expense for the next five years and thereafter consists of the following:

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Goodwill

The Company’s operating segments are significant strategic business units that align its products and services with how it manages its business, approaches the markets and interacts with clients. The Company is organized into two segments: Applied Workflow Automation and Technology (See Note 21, Segment Information).

Goodwill by reporting segment consists of the following:

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The Company tests for goodwill impairment at the reporting unit level on October 1 of each year and between annual tests if a triggering event indicates the possibility of an impairment. The Company monitors changing business conditions as well as industry and economic factors, among others, for events which could trigger the need for an interim impairment analysis.

During the period August 1, 2025 to September 30, 2025 (Successor), the Company experienced a sustained and significant decline in its market capitalization causing the market capitalization to fall below the Company’s book value after the application of fresh start accounting at Emergence Date. Management concluded that this sustained decline, combined with revised long-term projections compared to those used to compute enterprise value of the reconstituted Successor as set forth in the Disclosure Statement for Joint Plan of Reorganization approved by the Bankruptcy Court, represented a triggering event under ASC 350, Intangibles – Goodwill and Other. As a result, the Company performed an interim quantitative goodwill impairment assessment for all reporting units as of September 30, 2025 (Successor).

The Company’s interim impairment assessment as of September 30, 2025 (Successor) utilized Discounted Cash Flow Method of the Income Approach and the Guideline Public Company Method of the Market Approach to determine the reporting units’ fair values. For the Discounted Cash Flow Method, we utilized discounted cash flow projections using market participant weighted average cost of capital calculation. The Guideline Public Company Method utilizes market data of similar publicly traded companies. In connection with the completion of the interim impairment test, the Company recorded an impairment charge of $215.8 million and $80.0 million to goodwill relating to the reporting units reported under the Applied Workflow Automation segment and Technology segment, respectively as of September 30, 2025 (Successor). The Company did not update its analysis for purposes of the annual impairment test as of October 1, 2025 as the measurement date of the interim impairment test performed as of September 30, 2025 was one day from the annual impairment test date.

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Additionally, later during the fourth quarter of 2025 (Successor), the Company conducted its annual budgeting process along with an update to its long-range plan. Following the completion of that process, the Company made an evaluation based on changes in the Company’s long-term projections, concluding that a triggering event for an impairment analysis had occurred for certain reporting units reported under the Applied Workflow Automation segment. Revised long-term projections resulted in lower than previously projected long-term future cash flows for certain reporting units which reduced the estimated fair values to below their carrying values. Accordingly, the Company performed quantitative impairment test as of December 31, 2025 (Successor), resulting in an impairment charge of $24.5 million to goodwill relating to the reporting units reported under the Applied Workflow Automation segment. Therefore, as a result of these two interim impairment assessments performed on September 30, 2025 (Successor) and December 31, 2025 (Successor), impairment charges totaling $320.3 million, were recorded to goodwill for the period August 1, 2025 to December 31, 2025 (Successor).

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The impairment charges are included within impairment of goodwill in the consolidated and combined statements of operations.