CV Sciences, Inc. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table summarizes the changes in the carrying amounts of goodwill (in thousands):


	Carrying Amount
Balance - December 31, 2022:	$	—
Acquisition of Cultured Foods		334
Translation adjustment		8
Balance - December 31, 2023:		342
Acquisition of Elevated Softgels		640
Translation adjustment		(11	)
Balance - December 31, 2024:	$	971

As of December 31, 2024, the Company performed its annual goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C. The Company's annual impairment analysis included a qualitative assessment to determine if it was necessary to perform the quantitative impairment test. After performing a qualitative test the Company concluded that it was more likely than not that the fair value of the reporting unit exceeds its carrying value. Accordingly, there was no indication of impairment and the quantitative impairment test was not performed. The Company did not record any goodwill impairment charges for the years ended December 31, 2024 and 2023.

Intangible Assets

The following table summarizes the intangible assets and the related accumulated amortization (in thousands):


	December 31, 2024			December 31, 2023
Gross carrying amount	$	116		$	78
Accumulated amortization		(22	)		(1	)
Translation adjustment		(1	)		1
Net carrying amount	$	93		$	78

Changes in the carrying amounts of intangible assets are summarized below (in thousands):


	In-process research and development			Trade names			Customer relationships			Total
Balance - December 31, 2022:	$	251		$	—		$	—		$	251
Impairment		(251	)		—			—			(251	)
Acquisition of Cultured Foods		—			52			26			78
Amortization		—			(1	)		—			(1	)
Translation adjustments		—			1			—			1
Balance - December 31, 2023:		—			52			26			78
Acquisition of Elevated Softgels		—			—			38			38
Amortization		—			(11	)		(10	)		(21	)
Translation adjustments		—			(1	)		(1	)		(2	)
Balance - December 31, 2024:	$	—		$	40		$	53		$	93

During the year ended December 31, 2023, the Company evaluated, on the basis of the weight of the evidence, the significance of all identified events and circumstances that could affect the significant inputs used to determine the fair value of the IPR&D for determining whether it is more likely than not that the IPR&D asset was impaired. After assessing the totality of events and circumstances and their potential effect on significant inputs to the fair value determination, the Company determined that it was more likely than not that the IPR&D asset was impaired. As such, the Company has estimated the fair value of the IPR&D and performed the quantitative impairment test. Based on the quantitative impairment test, the Company determined that its IPR&D was impaired by $0.3 million. As a result, the Company recorded this impairment to reduce its intangible assets on its consolidated balance sheet as of December 31, 2023 and recorded the corresponding impairment expense, which was included in selling, general and administrative expense in the Company's consolidated statements of operations for the year ended December 31, 2023. There was no impairment charge for the year ended December 31, 2024.

The Company did not incur costs to renew or extend the term of acquired intangible assets for the years ended December 31, 2024 and 2023. The estimated amortization expense for the Company's intangible assets is not significant in any future individual fiscal year.