IGC Pharma, Inc. Goodwill & Intangibles Disclosure
NOTE 5 – INTANGIBLE ASSETS
| Amortized intangible assets | (in thousands) | |||||||
| As of March 31, 2025 ($) | As of March 31, 2024 ($) | |||||||
| Patents | 530 | 836 | ||||||
| Other intangibles | 34 | 34 | ||||||
| Accumulated amortization | (205 | ) | (181 | ) | ||||
| Total amortized intangible assets | 359 | 689 | ||||||
| Unamortized intangible assets | ||||||||
| Patents | 630 | 521 | ||||||
| Software development cost | 863 | 406 | ||||||
| Total unamortized intangible assets | 1,493 | 927 | ||||||
| Total intangible assets | 1,852 | 1,616 | ||||||
The value of intangible assets includes the cost of acquiring patent rights, supporting data, and the expense associated with filing various patent applications in different countries along with granted patents. It also includes acquisition costs related to domains and licenses.
The amortization of patent and patent rights with finite life is up to 20 years, commencing from the date of grant or acquisition. The note reflects the abandonment and expiration of certain non-core patent applications that management determined no longer aligned with the Company’s strategic focus or had limited commercial potential. The related assets were fully impaired and removed from the balance sheet. The expense was recognized in the consolidated statements of operations as part of general and administrative expenses. The Company continues to evaluate its intellectual property portfolio to ensure alignment with its long-term development and commercialization strategy.
| Estimated amortization expense | (in thousands) ($) |
|||
| For the year ended 2026 | 55 | |||
| For the year ended 2027 | 60 | |||
| For the year ended 2028 | 66 | |||
| For the year ended 2029 | 73 | |||
| For the year ended 2030 | 80 | |||
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.