XML 18 R10.htm IDEA: XBRL DOCUMENT
v3.25.2

INTANGIBLE ASSETS AND GOODWILL | 3 Months Ended | 12 Months Ended
--- | --- | ---
Dec. 31, 2024 | Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract] |  |
INTANGIBLE ASSETS AND GOODWILL | NOTE 4 INTANGIBLE ASSETS AND GOODWILL Intangible Assets The Company’s intangible assets consist of the following:
Schedule of intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31, 2024 |  |  | September 30, 2024 |
|  | Trademarks |  |  | Customer Relationships |  |  | Total Intangible Assets |  |  | Trademarks |  |  | Customer Relationships |  |  | Total Intangible Assets |
Gross carrying amount |  | $ | 585,000 |  |  | $ | 1,390,000 |  |  | $ | 1,975,000 |  |  | $ | 585,000 |  |  | $ | 1,390,000 |  |  | $ | 1,975,000 |
Less accumulated amortization |  |  | (252,000 | ) |  |  | (1,096,000 | ) |  |  | (1,348,000 | ) |  |  | (242,000 | ) |  |  | (1,053,000 | ) |  |  | (1,295,000 | )
Net carrying amount |  | $ | 333,000 |  |  | $ | 294,000 |  |  | $ | 627,000 |  |  | $ | 343,000 |  |  | $ | 337,000 |  |  | $ | 680,000 |
The Company’s intangible assets resulted from the acquisitions of Kablooe and IPS in Fiscal 2020 and Fiscal 2018, respectively, and relate to the design segment of our business. Intangible assets are amortized over their expected useful lives of 15 years for the trademarks and eight years for the customer relationships. Amortization expense related to intangible assets was $53,000 for the three months ended December 31, 2024 and 2023, which is included in general and administrative expenses on the condensed consolidated statements of operations. At December 31, 2024, estimated amortization expense for the Company’s intangible assets is as follows:
Schedule of estimated amortization expense |  |  |  |
Remainder of Fiscal 2025 |  | $ | 160,000 |
Fiscal 2026 |  |  | 121,000 |
Fiscal 2027 |  |  | 82,000 |
Fiscal 2028 |  |  | 78,000 |
Fiscal 2029 |  |  | 39,000 |
Fiscal 2030 |  |  | 39,000 |
Thereafter |  |  | 108,000 |
Total |  | $ | 627,000 |
Goodwill Goodwill represents the future economic benefits of assets acquired in a business combination that are not individually identified or separately recognized. The Company’s goodwill resulted from the acquisitions of Kablooe and IPS in Fiscal 2020 and Fiscal 2018, respectively. The goodwill associated with the IPS acquisition is not deductible for tax purposes, but the goodwill associated with the Kablooe acquisition is deductible for tax purposes. All of the Company’s goodwill is held under the design segment of our business. In December 2024, IPS was notified by its largest customer of its plan to discontinue its insulin patch pump program, on which IPS was working, and was beginning to wind down all activities related to it. Revenue from this customer (all of which related to this program) represented more than 30% of the Company’s consolidated net revenues in fiscal 2024. Due to the historically high concentration of revenue with this customer, the loss of its business was considered a triggering event which prompted the Company to evaluate the goodwill of the IPS reporting unit. Management concluded an impairment was more likely than not to have occurred and performed a quantitative goodwill impairment test for the IPS reporting unit at December 31, 2024. Using primarily an income approach methodology, the fair value of the IPS reporting unit was estimated using a discounted cash flow analysis incorporating variables categorized within Level 3 of the fair value hierarchy such as projected revenues, growth rate and discount rate. The quantitative testing indicated the carrying amount of the IPS reporting unit exceeded its fair value, resulting in a goodwill impairment charge of $225,000 in the three months ended December 31, 2024, primarily driven by a reduction in the expected future performance of the IPS reporting unit. Below is a rollforward of goodwill for the design segment, the only reportable segment with goodwill:
Schedule of roll forward of goodwill |  |  |  |
Balance at September 30, 2024 |  | $ | 1,559,000 |
Impairment of IPS reporting unit |  |  | (225,000 | )
Balance at December 31, 2024 |  | $ | 1,334,000 |
| NOTE 4 INTANGIBLE ASSETS AND GOODWILL Intangible Assets The Company’s intangible assets consist of the following:
Schedule of intangible assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | September 30, 2024 |  |  | September 30, 2023 |
|  | Trademarks |  |  | Customer Relationships |  |  | Total Intangible Assets |  |  | Trademarks |  |  | Customer Relationships |  |  | Total Intangible Assets |
Gross carrying amount |  | $ | 585,000 |  |  | $ | 1,390,000 |  |  | $ | 1,975,000 |  |  | $ | 585,000 |  |  | $ | 1,390,000 |  |  | $ | 1,975,000 |
Less accumulated amortization |  |  | (242,000 | ) |  |  | (1,053,000 | ) |  |  | (1,295,000 | ) |  |  | (203,000 | ) |  |  | (879,000 | ) |  |  | (1,082,000 | )
Net carrying amount |  | $ | 343,000 |  |  | $ | 337,000 |  |  | $ | 680,000 |  |  | $ | 382,000 |  |  | $ | 511,000 |  |  | $ | 893,000 |
The Company’s intangible assets resulted from the acquisitions of Kablooe and IPS in Fiscal 2020 and Fiscal 2018, respectively, and relate to the design segment of our business. Intangible assets are amortized over their expected useful lives of 15 years for the trademarks and eight years for the customer relationships. During Fiscal 2024 and Fiscal 2023, the Company recorded amortization expense related to intangible assets of $213,000, which is included in general and administrative expenses in the Company’s consolidated statements of operations. At September 30, 2024, estimated amortization expense for the Company’s intangible assets for each of the next five years and thereafter is as follows:
Schedule of estimated amortization expense |  |  |
Fiscal 2025 |  | $ | 213,000 |
Fiscal 2026 |  |  | 121,000 |
Fiscal 2027 |  |  | 81,000 |
Fiscal 2028 |  |  | 78,000 |
Fiscal 2029 |  |  | 39,000 |
Thereafter |  |  | 148,000 |
Total |  | $ | 680,000 |
Goodwill Goodwill represents the future economic benefits of assets acquired in a business combination that are not individually identified or separately recognized. The Company’s goodwill resulted from the acquisitions of Kablooe and IPS in Fiscal 2020 and Fiscal 2018, respectively and are held under the design segment of our business. The goodwill associated with the IPS acquisition is not deductible for tax purposes, but the goodwill associated with the Kablooe acquisition is deductible for tax purposes. Due to historical losses of the Kablooe reporting unit, the Company elected to bypass the qualitative assessment and perform quantitative goodwill impairment testing for the Kablooe reporting unit at September 30, 2024. Using an income approach methodology, the fair value of the Kablooe reporting unit was estimated with a discounted cash flow analysis incorporating variables categorized within level 3 of the fair value hierarchy such as projected revenues, growth rate and discount rate. This quantitative testing indicated the carrying amount of the Kablooe reporting unit exceeded its fair value, resulting in a goodwill impairment charge of $200,000 in fiscal 2024, primarily driven by a reduction in the expected future performance of the Kablooe reporting unit. The Company performed the annual goodwill impairment test for Fiscal 2023 and determined there was no impairment. Below is the rollforward of goodwill for the design segment, the only reportable segment with goodwill:
Schedule of roll forward of goodwill |  |  |
Balance at September 30, 2023 |  | $ | 1,759,000 |
Impairment of Kablooe reporting unit |  |  | (200,000 | )
Balance September 30, 2024 |  | $ | 1,559,000 |

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-30/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/350-20/tableOfContent + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration