Quarterly report [Sections 13 or 15(d)]

Goodwill and Intangible Assets

v3.25.1
Goodwill and Intangible Assets
3 Months Ended
Mar. 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

Note 6 – Goodwill and Intangible Assets

Goodwill represents the excess of cost over the fair value of identifiable net assets acquired related to the original purchase of the various franchise businesses and acquisition of company-owned transition studios. Goodwill is not amortized but is tested annually for impairment or more frequently if indicators of potential impairment exist. The carrying value of goodwill at March 31, 2025 and December 31, 2024, totaled $135,240. Cumulative goodwill impairment was $47,920 at March 31, 2025 and December 31, 2024.

At March 31, 2025, the trademark intangible asset related to the CycleBar reporting unit of $9,649, and the franchise agreements intangible assets related to BFT reporting unit of $1,047, are considered to be at a heightened risk of future impairment in the event of significant unfavorable changes in assumptions, including forecasted future cash flows, as well as discount rates and other macroeconomic factors.

At March 31, 2025, the goodwill related to the Pure Barre and BFT reporting units of $42,548 and $5,105, respectively, are at a heightened risk of future impairment if the fair value of the Pure Barre and BFT reporting units, and their associated assets, decreases in value due to the amount and timing of expected future cash flows, an inability to execute management’s business strategies or general market conditions, such as economic downturns, and changes in interest rates, including discount rates. Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company's estimates. If the Company's ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the terminal growth rate or the weighted-average cost of capital, the Company may have to record impairment charges in future periods.

Intangible assets consisted of the following:

 

 

 

 

 

March 31, 2025

 

 

December 31, 2024

 

 

 

Amortization
period
(years)

 

Gross
amount

 

 

Accumulated
amortization

 

 

Net
amount

 

 

Gross
amount

 

 

Accumulated
amortization

 

 

Net
amount

 

Trademarks

 

10

 

$

23,410

 

 

$

(7,413

)

 

$

15,997

 

 

$

23,410

 

 

$

(6,828

)

 

$

16,582

 

Franchise agreements

 

7.5 – 10

 

 

31,800

 

 

 

(23,190

)

 

 

8,610

 

 

 

31,800

 

 

 

(22,210

)

 

 

9,590

 

Intellectual property

 

5

 

 

670

 

 

 

(168

)

 

 

502

 

 

 

670

 

 

 

(134

)

 

 

536

 

Web design and domain

 

3 – 10

 

 

413

 

 

 

(382

)

 

 

31

 

 

 

413

 

 

 

(380

)

 

 

33

 

Deferred video production costs

 

3

 

 

6,501

 

 

 

(4,624

)

 

 

1,877

 

 

 

6,102

 

 

 

(4,255

)

 

 

1,847

 

Total definite-lived intangible assets

 

 

 

 

62,794

 

 

 

(35,777

)

 

 

27,017

 

 

 

62,395

 

 

 

(33,807

)

 

 

28,588

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks

 

N/A

 

 

72,356

 

 

 

 

 

 

72,356

 

 

 

72,356

 

 

 

 

 

 

72,356

 

Total intangible assets

 

 

 

$

135,150

 

 

$

(35,777

)

 

$

99,373

 

 

$

134,751

 

 

$

(33,807

)

 

$

100,944

 

 

Amortization expense was $1,970 and $2,948, for the three months ended March 31, 2025 and 2024, respectively.

The anticipated future amortization expense of intangible assets is as follows:

 

 

 

Amount

 

Remainder of 2025

 

$

5,709

 

2026

 

 

5,124

 

2027

 

 

3,570

 

2028

 

 

3,143

 

2029

 

 

2,856

 

Thereafter

 

 

6,615

 

Total

 

$

27,017