7. GOODWILL AND INTANGIBLE ASSETS

Goodwill

A reconciliation of the beginning and ending balances of goodwill during the year ended December 31, 2021 is as follows:

No goodwill was recorded during the year ended December 31, 2022.

The Company evaluates goodwill for impairment annually during the fiscal third quarter and when an event occurs, or circumstances change such that it is reasonably possible that impairment may exist. The Company accounts for goodwill and evaluates its goodwill balances and tests them for impairment in accordance with related accounting standards. As a result of its annual impairment assessment in the third quarter of fiscal 2021, the Company realized a $357 impairment of goodwill related to its investment in the assets of Acme Inc., a manufacturer of vape cartridges and disposable pens, which is recorded in general and administrative expenses in our consolidated financial statements for the year ended December 31, 2021.

Other Intangible Assets

A reconciliation of the beginning and ending balances of intangible assets and accumulated amortization during the years ended December 31, 2022 and 2021 are as follows:

Intangible assets with finite lives are amortized over their estimated useful lives. Amortization periods of assets with finite lives are based on management's estimates at the date of acquisition. The Company recorded amortization expense of $354, and $177 for the years ended December 31, 2022, and 2021, respectively.

During the year ended December 31, 2022, the Company acquired rights to purchase additional manufacturing equipment related to the Lowell 35s automated pre-roll line. Per the terms of the purchase agreement, the Company acquired the rights to acquire eight pre-roll machines and one packaging machine and received 15% of the issued and outstanding shares of the selling company, which have a fair market value of $nil. For the year ended December 31, 2022, one pre-roll machine and the packaging machine were received and in use and the acquired purchase rights are being amortized over the five year useful life of the machines. As consideration for the purchase of the acquisition rights, the Company paid for deposits on a portion of the machines, which are reflected as additions within Property and Equipment and issued 10 million subordinate voting shares with a fair market value of  $1,800 on the issuance date.

The Company estimates that amortization expense for our existing other intangible assets will average approximately $346 annually for the next nine and a half fiscal years. Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, changes in useful lives or other relevant factors or changes.

The Company signed the LOI to sell certain brands and the related intangible assets in March of 2023. While the deal has not closed, refer to “Subsequent Events” for more information.