Company: MYND
Filing Date: 2025-03-26
Form Type: 20-F
Source: 0001628280-25-014832
Chunk: 101

Company: Mynd.ai, Inc.
Filing Date: 2025-03-26
Form: 20-F
Item: Item 18
Chunk 101
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 selection of comparable companies. In

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estimating the fair value of the tradename, the Company uses a relief from royalty income-based method, which requires management to estimate forecasts of revenue, royalty rates, and discount rates. The goodwill balance was $44.1 million and the indefinite-lived intangible asset was $36 million, as of December 31, 2024. The estimated fair value of the reporting unit and the indefinite-lived intangible asset exceeded their carrying values as of the measurement date and, therefore, no impairment was recognized.

We identified management’s estimation of the fair value of the reporting unit and indefinite-lived intangible asset as a critical audit matter because of the significant estimates and assumptions management makes to estimate their respective fair values and the sensitivity of the estimates to the determination of their respective fair values. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of revenues, operating margins, growth rates, discount rate, revenue market multiples, selection of guideline public companies, weighting of approaches, and royalty rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of revenues, operating margins, growth rates, discount rate, revenue market multiples, selection of guideline public companies, weighting of approaches, and royalty rate, included the following, among others:

•We evaluated the reasonableness of management's projections by comparing the projections to:

◦ historical results

◦ budget approved by management and the Company’s board of directors

◦ information included in industry reports and certain of its peer companies

◦ Internal communications to management and the board of directors

• We evaluated the reasonableness of management's selection of comparable companies with similar operations and economic characteristics.

• We evaluated the competency and objectivity of management's expert engaged by the Company to assist in the income based, market based and relief from royalty valuation models.

• With the assistance of our fair value specialists, we evaluated the reasonableness of management's valuation methodology and significant assumptions by:

◦ Evaluating the reasonableness of the discount rate, royalty rate, control premium, and revenue market multiples by comparing the underlying source information to publicly available market data and verifying the accuracy of the calculations.

◦ Evaluating the weighting of the income and market approaches.

◦ Evaluating the appropriateness of the valuation methods used by management and testing their