Annual report pursuant to Section 13 and 15(d)

Note 6 - Goodwill and Intangible Assets

Note 6 - Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Text Block]

Note 6—Goodwill and Intangible Assets

Goodwill and components of intangible assets consist of the following (in thousands):

	September 2023							September 2022
	Cost		Accumulated Impairment Losses			Net Value		Cost		Accumulated Impairment Losses			Net Value		Economic Life

Goodwill:
Delta Group	$	18,592	$	(9,812	)	$	8,780	$	18,592	$	(612	)	$	17,980		N/A
Salt Life Group		19,917		-			19,917		19,917		-			19,917		N/A
Total goodwill, net	$	38,509	$	(9,812	)	$	28,697	$	38,509	$	(612	)	$	37,897

	*September 2023*							*September 2022*
	*Cost*		*Accumulated Amortization*			*Net Value*		*Cost*		*Accumulated Amortization*			*Net Value*		*Economic Life*
Intangibles:
Tradename/trademarks	$	16,000	$	(5,384	)	$	10,616	$	16,000	$	(4,851	)	$	11,149	20 - 30 yrs
Customer relationships		7,400		(3,953	)		3,447		7,400		(3,213	)		4,187	20 yrs
Technology		10,083		(3,509	)		6,574		10,083		(2,610	)		7,473	10 yrs
License agreements		2,100		(1,043	)		1,057		2,100		(940	)		1,160	15 - 30 yrs
Non-compete agreements		1,657		(1,657	)		-		1,657		(1,600	)		57	4 – 8.5 yrs
Total intangibles, net	$	37,240	$	(15,546	)	$	21,694	$	37,240	$	(13,214	)	$	24,026

Goodwill represents the acquired goodwill net of the cumulative impairment losses recorded in fiscal years 2023 and 2011 of $9.2 million and $0.6 million, respectively.

In the fourth quarter of fiscal year 2023, the Company recorded a goodwill impairment charge of $9.2 million associated with the DTG2Go reporting unit. This impairment resulted from an interim impairment assessment of DTG2Go goodwill, which we were required to perform in the fourth quarter of fiscal year 2023 due to the adverse impact of the market conditions on our current year profitability and estimated future business results and cash flows, as well as the significant decrease in our market capitalization because of a sustained decline in our common stock price. Refer to Note 2 – Significant Accounting Policies for further discussion of this impairment.

Depending on the type of intangible assets, amortization is recorded under cost of goods sold or selling, general and administrative expenses. Amortization expense for intangible assets was $2.3 million for the year ended September 2023 , and $2.4 million for the year ended September 2022 . Amortization expense is estimated to be approximately $2.3 million for the year ended September 2024, approximately $2.2 million for the years ended September 2025 and 2026, approximately $2.0 million for the years ended September 2027, and approximately $1.5 million for the year ended September 2028.