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Note 8 - Goodwill and Intangible Assets

9 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Text Block]

8. GOODWILL AND INTANGIBLE ASSETS

Goodwill is attributable to the acquisitions of Genasys Spain and Zonehaven, and the Amika Mobile asset purchase and is due to combining the integrated emergency critical communications, mass messaging solutions, and software development capabilities with existing hardware products for enhanced offerings and the skill level of the acquired workforces. The Company periodically reviews goodwill for impairment in accordance with relevant accounting standards. In the fourth quarter of fiscal 2022, in conjunction with the annual impairment assessment, the Company determined that the fair value of the software reporting unit was less than the carrying value. The Company engaged independent valuation experts to assist in determining the fair value of the software reporting unit and recorded a $13,162 goodwill impairment charge. As of June 30, 2023, and September 30, 2022, goodwill was $10,348 and $10,118 respectively. There were no additions or impairments to goodwill during the nine months ended June 30, 2023.

The changes in the carrying amount of goodwill by segment for the nine months ended June 30, 2023, were as follows:

	Hardware		Software		Total
Balance as of September 30, 2022	$	-	$	10,118	$	10,118
Currency translation		-		230		230
Balance as of June 30, 2023	$	-	$	10,348	$	10,348

The changes in the carrying amount of intangible assets by segment for the nine months ended June 30, 2023, were as follows:

	Hardware			Software			Total
Balance as of September 30, 2022	$	21		$	10,484		$	10,505
Amortization		(3	)		(1,580	)		(1,583	)
Currency translation		-			36			36
Balance as of June 30, 2023	$	18		$	8,940		$	8,958

Intangible assets and goodwill related to Genasys Spain are translated from Euros to U.S. dollars at the balance sheet date. The net impact of foreign currency exchange differences arising during the period related to goodwill and intangible assets was an increase of $266.

The Company’s consolidated intangible assets consisted of the following:

	June 30,			September 30,
	2023			2022
Technology	$	11,947		$	11,886
Customer relationships		1,807			1,715
Trade name portfolio		611			590
Non-compete agreements		229			206
Patents		72			72
		14,666			14,469
Accumulated amortization		(5,708	)		(3,964	)
	$	8,958		$	10,505

As of June 30, 2023, future amortization expense is as follows:

Fiscal year ending September 30,
2023 (remaining three months)	$	525
2024		2,099
2025		1,979
2026		1,842
2027		1,669
Thereafter		844
Total estimated amortization expense	$	8,958

Amortization expense was $525 and $537 for the three months ended June 30, 2023 and 2022, respectively. Amortization expense was $1,583 and $1,621 for the nine months ended June 30, 2023 and 2022, respectively.