TILT Holdings Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets

Intangible Assets

9 Months Ended

Sep. 30, 2022

Intangible Assets

Intangible Assets

7.Intangible Assets

Intangible asset balances consisted of the following:


Intangible assets	September 30, 2022		December 31, 2021
Customer relationships	$	85,300	$	85,300
Trademarks		29,000		29,000
License rights⁽¹⁾		17,891		17,891
Management agreements		926		926
Patents & technologies		32,900		32,900
Backlog and non-competition agreements		10,406		10,406
Total intangible assets, at cost		176,423		176,423
Less: Accumulated amortization		(58,681)		(47,653)
Total intangible assets, net	$	117,742	$	128,770

_____________

(1)License rights including indefinite-lived intangible assets, which pertain to licenses for cultivation and processing, are not subject to amortization and are tested annually for impairment. Refer to Note 2 — Summary of Significant Accounting Policies of the Company’s audited consolidated financial statements and accompanying notes as of and for the years ended December 31, 2021 and 2020 filed with the Form 10 for further information pertaining to the Company’s accounting policies for its intangible assets.

Amortization expense for the three months ended September 30, 2022 and 2021, was $3,677 and $3,668, respectively. Amortization expense for the nine months ended September 30, 2022 and 2021, was $11,030 and $10,971, respectively. This amortization expense is included in depreciation and amortization in the condensed consolidated statements of operations and comprehensive loss.

The following table outlines the estimated future annual amortization expense related to intangible assets as of September 30, 2022:


	Estimated
Years ended December 31,	amortization
Remainder of 2022	$	3,676
2023		13,056
2024		13,056
2025		13,056
2026		12,899
Thereafter		44,268
	$	100,011