Company: LASR
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001124796-25-000021
Chunk: 47

Company: NLIGHT, INC.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 8
Chunk 47
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 when the purchase price of an acquisition exceeds the fair value of the net assets acquired. Goodwill is not amortized and is tested for impairment at least annually and more frequently if material changes in events or circumstances arise. We perform an annual impairment review of goodwill in the fourth quarter of each year using either a qualitative assessment or a quantitative goodwill impairment test. If the qualitative assessment is selected and determines that the fair value of each reporting unit more likely than not exceeds its carrying value, no further assessment is necessary. If a quantitative test is determined necessary and an impairment is indicated, the impairment loss is recorded to the extent that the reporting unit’s carrying amount exceeds the reporting unit’s fair value. An impairment loss cannot exceed the total amount of goodwill allocated to the reporting unit.During the fourth quarter of 2024, we performed a quantitative test to determine if impairment existed. The fair values of our reporting units were determined using a weighted average of a market approach and an income approach. Under the market approach, fair values were estimated using published market multiples for comparable companies. We calculated fair values under the income approach by taking estimated future cash flows that are based on internal projections and other assumptions deemed reasonable by management and discounted them using an estimated weighted average cost of capital. The results of the quantitative test showed that the fair value of each of the company's reporting units significantly exceeded its carrying value and there was no impairment of goodwill. Based on qualitative assessments performed in fiscal years 2023 and 2022, the fair values of the Laser Products and Advanced Development reporting units exceeded their carrying values, and no impairment charges were recorded. See Note 9 for additional information.

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Intangible AssetsDefinite-lived intangible assets consist of acquisition-related development programs, developed technology, and intellectual property. The intangible assets are being amortized using the straight-line method over periods of 2 to 5 years, which reflect the pattern in which economic benefits of the assets are expected to be realized. See Note 9 for additional information.Other AssetsOther assets, net primarily consist of long-term accounts receivable, demonstration ("demo") assets and deposits.Demo assets are equipment that is used for demonstration and other purposes with existing and prospective customers. Demo assets are recorded at cost and amortized over an estimated useful life of approximately two years.  Amortization expense related to demo assets was as follows (in thousands):Year Ended December 31, 202420232022Amortization expense$3,766 $1,150 $1,544 Restruct