Quarterly report pursuant to Section 13 or 15(d)

GOODWILL AND INTANGIBLE ASSETS

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GOODWILL AND INTANGIBLE ASSETS
 9 Months Ended
Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS GOODWILL AND INTANGIBLE ASSETS
Goodwill
The Company had $5.1 million in goodwill as of December 31, 2021. The Company recorded $1.2 million of goodwill related to the WonderBlocks Acquisition during the three and nine months ended September 30, 2022. See Note 3—Business Combinations for further discussion. There were no business combinations during the three and nine months ended September 30, 2021. There were no indicators of impairment as of September 30, 2022 and December 31, 2021.
Intangible Assets
The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset other than goodwill:
September 30, 2022 December 31, 2021
Gross
Carrying
Amount		 Accumulated
Amortization		 Net
Carrying
Amount		 Gross
Carrying
Amount		 Accumulated
Amortization		 Net
Carrying
Amount
Amortizable intangible assets:
Licenses $ 19,000  $ (6,305) $ 12,695  $ 19,000  $ (1,245) $ 17,755 
Acquired technology 2,403  (80) 2,323  —  —  — 
Trade names 1,240  (1,240) —  1,240  (1,240) — 
22,643  (7,625) 15,018  20,240  (2,485) 17,755 
Nonamortizable intangible assets:
Marketing Agreement with a related party 1,000  —  1,000  1,000  —  1,000 
Total intangible assets $ 23,643  $ (7,625) $ 16,018  $ 21,240  $ (2,485) $ 18,755 
Intangible assets consist of trade names, long-term license agreements with various third parties, and the technology acquired from WonderBlocks. In 2021, the Company entered into agreements with N3TWORK Inc. and The Tetris Company, LLC pursuant to which the Company acquired the rights to develop and operate Tetris®-branded mobile games for an initial term through August 2024. The Company paid N3TWORK Inc. $13.0 million at closing and agreed to pay up to an additional $34.0 million subject to satisfaction of certain conditions, of which $8.0 million was an Advance Payment (as defined in Note 15—Commitments and Contingencies). In addition, the Company will pay royalties to The Tetris Company, LLC, the licensor of the rights.
The aggregate amortization expense for amortizable intangible assets is reflected in “Depreciation and amortization” in the Consolidated Statements of Operations. During the three months ended September 30, 2022 and 2021, amortization was $1.8 million and $0.1 million, respectively, and during the nine months ended September 30, 2022 and 2021, amortization was $5.1 million and $0.3 million, respectively. There were no impairment charges for intangible assets for the three and nine months ended September 30, 2022 and 2021.
As of September 30, 2022, the estimated annual amortization expense for the years ending December 31, 2022 through 2026 is as follows:
Year Ending December 31, Projected Amortization
Expense
Remaining 2022
 $ 1,807 
2023 7,126 
2024 4,844 
2025 481 
2026 481 
Total $ 14,739