Intangible Assets and Goodwill

6 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets arose from the acquisition of SDI in fiscal year 2019 and the acquisitions of S&N and EMCORE Chicago in fiscal year 2022 and are reported within the A&D segment. Definite-lived intangible assets are amortized on a straight-line basis over the estimated useful life of: (a) 7.0 years for patents, (b) 8.0 years for customer relationships, and (c) 2.0-8.0 years for technology. In-process research and development (“IPR&D”) is indefinite-lived until completion of the related development project, at which point amortization of the carrying value of the technology will commence. Trademarks are indefinite-lived.

The following table summarizes changes in intangible assets, net:


(in thousands)	March 31, 2023		September 30, 2022
Balance at beginning of period	$	14,790	$	167
Changes from acquisition	770		14,740
Amortization	(613)		(117)
Balance at end of period	$	14,947	$	14,790

The weighted average remaining useful lives by definite-lived intangible asset category are as follows:


	March 31, 2023
(in thousands, except weighted average remaining life)	Weighted Average Remaining Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Technology	3.6	$	11,001	$	(8,587)	$	2,414
Customer relationships	3.1	3,990		(337)		3,653
Definite-lived intangible assets total		$	14,991	$	(8,924)	$	6,067

As of March 31, 2023, IPR&D and trademarks was approximately $6.7 million and $2.2 million, respectively.


	September 30, 2022
(in thousands, except weighted average remaining life)	Weighted Average Remaining Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Technology	5.4	$	10,991	$	(8,261)	$	2,730
Customer relationships	4.6	3,260		(50)		3,210
Definite-lived intangible assets total		$	14,251	$	(8,311)	$	5,940

As of September 30, 2022, IPR&D and trademarks was approximately $6.7 million and $2.2 million, respectively.

Estimated future amortization expense for intangible assets recorded by the Company as of March 31, 2023 is as follows:


(in thousands)	Amount
2023	$	575
2024	1,131
2025	1,104
2026	702
2027	679
Thereafter	1,876
Total amortization expense	$	6,067

Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. None of the Company's goodwill is deductible for tax purposes. The following table summarizes changes in goodwill:


(in thousands)	March 31, 2023		September 30, 2022
Balance at beginning of period	$	17,894	$	69
Adjustments to preliminary purchase price allocation	(1,472)		17,825
Balance at end of period	$	16,422	$	17,894