Note 11 - Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

11. Goodwill and Other Intangible Assets

At September 30, 2024, the Company had goodwill of $0.7 million and other intangible assets, net of $0.5 million attributable to its Adjacent Markets reporting unit and other intangible assets, net of $1.2 million attributable to its Oil and Gas Markets reporting unit. Goodwill represents the excess cost of a business acquired over the fair market value of identifiable net assets at the date of acquisition.

At September 30, 2024, in light of the Company's historical losses and continued delays in obtaining additional contracts from the U.S. Customs and Border Protection and other customers on its Emerging Markets segment, the Company performed a recoverability assessment on the long-lived assets of its Emerging Markets asset group in which its carrying value was compared to estimated undiscounted cash flows over the remaining useful life of the asset group's primary asset, its developed technology.  Accordingly, a fair value analysis was performed.  Based on the assessment, the Company determined the fair value of the asset was less than its carrying value.  The Company used an excess earnings approach to value the asset.  Key assumptions used in the analysis include revenue, gross margin and cash flow projections.  As a result of the assessment, the Company recorded an impairment charge of $2.8 million on this asset group, which impaired its intangible assets in their entirety. 

Also see Note 1 to these consolidated financial statements.

The Company’s consolidated goodwill and other intangible assets consisted of the following (in thousands):

	Weighted-Average Remaining Useful Lives (in years)	AS OF SEPTEMBER 30,
		2024			2023
Goodwill:
Emerging Markets reporting unit		$	4,336		$	4,336
Adjacent Markets reporting unit			736			736
Total goodwill			5,072			5,072
Accumulated impairment losses			(4,336	)		(4,336	)
		$	736		$	736
Other intangible assets:
Developed technology	4.5	$	2,275		$	6,475
Customer relationships	—		3,900			3,900
Trade names	0.1		2,022			2,022
Non-compete agreements	0.1		186			186
Total other intangible assets	2.3		8,383			12,583
Accumulated amortization			(6,734	)		(7,778	)
		$	1,649		$	4,805

Other intangible assets amortization expense for fiscal years 2024 and 2023 was $0.4 million and $0.8 million, respectively.

As of September 30, 2024, fiscal year future estimated amortization expense of other intangible assets is as follows (in thousands):

2025		148
2026		140
2027		126
2028		126
2029		126
Thereafter		983
	$	1,649