Note 6 - Intangible Assets

6 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note

6

– Intangible Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount

may

not

be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC

360

-

10

-

15,

“Impairment or Disposal of Long-Lived Assets.”  ASC

360

-

10

-

15

requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows.  If the undiscounted future cash flows do

not

indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals.

As of

March 31, 2020,

the Company determined that changes in the economy related to the COVID-

19

pandemic and the continued losses experienced in the Telco segment

may

cause the carrying amounts of its intangible assets to exceed their fair values.  The Company performed an assessment of its intangible assets and determined that the carrying value of its customer relationships were in fact impaired based on valuation appraisals performed by the Company using a multi-period excess earnings model.  Therefore, the Company recorded a

$3.9

million impairment charge in the Telco segment.

Intangible assets with their associated accumulated amortization and impairment at

March 31, 2020

and

September 30, 2019

are as follows:

	March 31, 2020
	Gross		Accumulated Amortization			Impairment			Net
Intangible assets:
Customer relationships – 10 years	$	8,396,000	$	(3,964,306	)	$	(3,894,121	)	$	537,573
Trade name – 10 years		2,119,000		(1,072,224	)		‒			1,046,776
Non-compete agreements – 3 years		374,000		(374,000	)		‒			‒
Total intangible assets	$	10,889,000	$	(5,410,530	)	$	(3,894,121	)	$	1,584,349

	September 30, 2019
	Gross		Accumulated Amortization			Net
Intangible assets:
Customer relationships – 10 years	$	8,396,000	$	(3,547,389	)	$	4,848,611
Trade name – 10 years		2,119,000		(966,280	)		1,152,720
Non-compete agreements – 3 years		374,000		(372,333	)		1,667
Total intangible assets	$	10,889,000	$	(4,886,002	)	$	6,002,998