Intangible Assets and Goodwill |
12 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Intangible Assets and Goodwill [Abstract] | |
| Intangible Assets and Goodwill | Note 8 –Intangible Assets and Goodwill Intangible Assets Intangible assets includes 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, 2021: Gross Carrying Accumulated Net Book Amount Amortization ValueIntangible asset with finite life: Covenants not-to-compete$ 500,000 $ 351,190 $ 148,810Indefinite-lived intangible assets: Acquired in-process research and development assets 3,900,000 — 3,900,000Total intangible assets$ 4,400,000 $ 351,190 $ 4,048,810 The gross carrying amounts and net book value of intangible assets are as follows at September 30, 2020: Gross Carrying Accumulated Net Book Amount Amortization ValueIntangible assets with finite lives: Developed technology - PREBOOST®$ 2,400,000 $ 768,111 $ 1,631,889Covenants not-to-compete 500,000 279,762 220,238Total intangible assets with finite lives 2,900,000 1,047,873 1,852,127Acquired in-process research and development assets 3,900,000 — 3,900,000Total intangible assets$ 6,800,000 $ 1,047,873 $ 5,752,127 During the fourth quarter of fiscal 2020, we performed quantitative impairment testing of our IPR&D intangible assets using a probability-weighted income approach that discounts expected future cash flows to present value. The estimated net cash flows were discounted using a discount rate of 41%, which is based on the estimated weighted-average cost of capital for companies with profiles similar to our profile and represents the rate that market participants would use to value the intangible assets. In response to management’s strategic decision during the fourth quarter of fiscal 2020 to prioritize the development of other research projects, we adjusted the development timelines for Tamsulosin DRS, VERU-722 (male infertility), and VERU-112 (gout) IPR&D assets. The Company has several other highly differentiated, unique, patent-protected drugs under development addressing larger and potentially more profitable markets. The delay in timing of expected future cash flows for Tamsulosin DRS, VERU-722, and VERU-112 reduced the fair value of these IPR&D intangible assets to zero, which was significantly below the carrying value, resulting in an impairment charge of $14.1 million, which is presented as a separate line item in the accompanying consolidated statement of operations. Further, the Company decided to cease its development work on Tamsulosin DRS, VERU-722, and VERU-112 and met the criteria for abandonment under the accounting standards. This resulted in writing off the carrying amounts for these three IPR&D assets during the year ended September 30, 2020. As discussed in Note 2, the Company sold its intangible assets related to PREBOOST® as part of the sale of the PREBOOST® business on December 8, 2020. The remaining net book value of the PREBOOST® technology, acquired in the acquisition of APP, was $1.6 million on the date of the sale. Amortization was 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 $113,000 and $316,000, for the years ended September 30, 2021 and 2020, respectively. Based on finite-lived intangible assets recorded as of September 30, 2021, the estimated future amortization expense is approximately $71,000 per year through fiscal 2023 and $6,000 in fiscal 2024. Goodwill The carrying amount of goodwill at September 30, 2021 and 2020 was $6.9 million. There was no change in the balance during the years ended September 30, 2021 and 2020. |