Other Information
+Added: July 20, 2023, the Company agreed to terminate the Master Services and Revenue Sharing Agreement with Central Bank.
+Added: Under the agreement,
+Added: the Company provided expertise and intellectual property that allowed the Company and Central Bank to jointly serve the deposit banking
+Added: needs of cannabis related businesses primarily located in Arkansas.
+Added: agreement was originally executed by Rockview Digital Solutions, LLC, which was acquired by the Company in October 2022.
+Added: have agreed that termination will be effective as of October 1, 2023, allowing for an orderly transition that will have minimal impact
+Added: on customer operations.
+Added: The agreement, originally executed in 2018, was renewable on an annual basis and did not include any material
+Added: early termination penalties.
+Added: June 30, 2023, the Company’s goodwill and finite lived intangible assets were measured at fair value as result of impairment triggered
+Added: due to termination of the Master Services and Revenue Sharing Agreement with Central Bank.
+Added: The fair value of goodwill was measured using
+Added: third-party valuation models with an equally weighted combination of both an income and market approach.
+Added: The income approach consists
+Added: of a discounted cash flow model which is based on the present value of projected cash flows.
+Added: The discounted cash flow model reflects
+Added: the Company’s assumptions regarding revenue growth rates, risk-adjusted discount rate, terminal period growth rate, economic and
+Added: market trends and other expectations about the anticipated operating results of the Company.
+Added: Under the market approach, the Company estimates
+Added: the fair value based on market multiples of revenues derived from comparable publicly traded companies with operating characteristics
+Added: similar to the Company.
+Added: In order to evaluate the fair value of the finite-lived intangible assets, a royalty method was applied for market
+Added: related intangibles, a discounted cash flow method applied for customer relationships and a cost to re-create method for developed technologies.
+Added: (Refer to note 5 - Goodwill and Finite-lived intangible assets.)
+Added: a result of the interim impairment analysis, the goodwill, market related intangible assets and customer relationships was determined
+Added: to have a carrying value that exceeded its fair value and therefore, a $13.21 million, $1.87 million and $1.82 million, respectively
+Added: were recognized as impairment expense in the Company’s unaudited condensed consolidated statements of operations for the three
+Added: and six months ended June 30, 2023.
+Added: value determination of the goodwill, market related intangible assets and customer relationships requires considerable judgment and is
+Added: sensitive to changes in underlying assumptions and factors.
+Added: As a result, there can be no assurance that the estimates and assumptions
+Added: made for purposes of the quantitative goodwill impairment tests will prove to be an accurate prediction of future results.
+Added: events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the
+Added: estimated fair value of these assets may include such items as:
+Added: (i) an increase in the weighted-average cost of capital due to further
+Added: increases in interest rates, (ii) timing and success of estimated future income, it is possible that an additional impairment charge
+Added: may be recorded in the future, which could be material.
+Added: The expense accounted for in relation to impairment will be non-cash and the
+Added: Company does not anticipate any cash expenditure in relation to the impairment loss which would need to be incurred in the future.
following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
31 unchanged sentences
undersigned, thereunto duly authorized.
−Removed: Sundie Seefried
Executive Officer
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.