Veru Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Intangible Assets and Goodwill

Intangible Assets and Goodwill

12 Months Ended

Sep. 30, 2019

Intangible Assets and Goodwill [Abstract]

Intangible Assets and Goodwill

Note 8 –Intangible Assets and Goodwill

Intangible Assets

Intangible assets acquired in the APP Acquisition included IPR&D, developed technology consisting of PREBOOST® medicated wipes for the treatment of premature ejaculation, and covenants not-to-compete.

The gross carrying amounts and net book value of intangible assets are as follows at September 30, 2019:



	Gross Carrying		Accumulated		Net Book
	Amount		Amortization		Value
Intangible assets with finite lives:
Developed technology - PREBOOST®	$	2,400,000	$	523,172	$	1,876,828
Covenants not-to-compete		500,000		208,333		291,667
Total intangible assets with finite lives		2,900,000		731,505		2,168,495
Acquired in-process research and development assets		18,000,000		—		18,000,000
Total intangible assets	$	20,900,000	$	731,505	$	20,168,495

The gross carrying amounts and net book value of intangible assets are as follows at September 30, 2018:


	Gross Carrying		Accumulated		Net Book
	Amount		Amortization		Value
Intangible assets with finite lives:
Developed technology - PREBOOST®	$	2,400,000	$	285,366	$	2,114,634
Covenants not-to-compete		500,000		136,905		363,095
Total intangible assets with finite lives		2,900,000		422,271		2,477,729
Acquired in-process research and development assets		18,000,000		—		18,000,000
Total intangible assets	$	20,900,000	$	422,271	$	20,477,729

Amortization is recorded over the projected related revenue stream for the PREBOOST® developed technology over 10 years and on a straight-line basis over seven years for the covenants not-to-compete. The amortization expense is recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations.

Amortization expense was approximately $309,000 and $275,000, for the years ended September 30, 2019 and 2018, respectively. Based on finite-lived intangible assets recorded as of September 30, 2019, the estimated future amortization expense is as follows:


	Estimated
Year Ending September 30,	Amortization Expense
2020	$	316,368
2021		323,706
2022		331,316
2023		339,062
2024		281,603
Thereafter		576,440
Total	$	2,168,495

Goodwill

The carrying amount of goodwill at September 30, 2019 and 2018 was $6.9 million. There was no change in the balance during the years ended September 30, 2019 and 2018.