Note 10 - Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

10. Goodwill and Other Intangible Assets

At September 30, 2023, the Company had goodwill of $0.7 million and other intangible assets, net of $0.5 million attributable to its Adjacent Markets reporting unit; other intangible assets, net of $3.0 million attributable to its Emerging Markets reporting unit; and other intangible assets, net of $1.3 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, 2023, in light of the Company's historical losses on its Emerging Markets reporting unit, the Company preformed 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.  The Company determined that no impairment was necessary as the future undiscounted cash flows exceeded the carrying value. Key assumptions used in the analysis include revenue, gross margin and cash flow projections.  The estimated cash flows include obtaining additional contracts with CBP and other current customers.  The Emerging Markets asset group could incur impairment charges in the future to its other intangible assets if it is unable to obtain additional contracts from the CBP or other customers.

At September 30, 2022, the Company assessed the goodwill associated with both its Adjacent Markets and Emerging Markets reporting units for impairment. As a result of the assessment, the Company determined that the fair value of its Emerging Markets reporting unit was less than its carrying amount and recorded an impairment charge of $4.3 million for the entire goodwill associated with this reporting unit for the fiscal year ended September 30, 2022.  No impairment charge to the Adjacent Markets asset group was necessary for the fiscal year ended September 30, 2022 as its future undiscounted cash flows exceeded the carrying value. 

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,
		2023			2022
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	13.2	$	6,475		$	6,475
Customer relationships	—		3,900			3,900
Trade names	0.2		2,022			2,022
Non-compete agreements	0.2		186			186
Total other intangible assets	6.8		12,583			12,583
Accumulated amortization			(7,778	)		(7,010	)
		$	4,805		$	5,573

Other intangible assets amortization expense for fiscal years 2023 and 2022 was $0.8 million and $1.7 million, respectively.

As of September 30, 2023, future estimated amortization expense of other intangible assets is as follows (in thousands):

For fiscal years ending September 30,
2024		395
2025		381
2026		374
2027		360
2028		360
Thereafter		2,935
	$	4,805