INVO Fertility, Inc. Goodwill & Intangibles Disclosure
Note 8 – Intangible Assets & Goodwill
Components of intangible assets are as follows:
| December 31, 2024 | December 31, 2023 | |||||||
| Tradename | $ | 510,000 | $ | 253,000 | ||||
| Noncompetition agreement | 3,961,000 | 3,961,000 | ||||||
| In-process research & development | 14,571,000 | |||||||
| Goodwill | 23,535,693 | 5,878,986 | ||||||
| Less: accumulated amortization | (938,069 | ) | (120,569 | ) | ||||
| Total intangible assets | $ | 41,639,624 | $ | 9,972,417 | ||||
As part of the WFI acquisition, that closed on August 10, 2023, the Company acquired a tradename valued at $253,000, noncompetition agreements valued at $3,961,000 and goodwill of $5,878,986 which includes assembled workforce valued at $34,000. The tradename was deemed to have a useful life of 10 years. The noncompetition agreements were deemed to have a useful life of 5 years. The useful life of the noncompetition agreements was based on the noncompetition clauses in the FLOW Equity Purchase Agreement and WFRSA Asset Purchase Agreement, each of which provides that none of the sellers will engage in any business or services that compete with the respective businesses for 5 years.
As part of the NTI acquisition, that closed on October 11, 2024, the Company acquired a tradename valued at $257,000, in-process research and development valued at $14,571,000 and goodwill of $17,656,707 which includes assembled workforce valued at $203,000. The NTI tradename and in-process research and development were deemed to have an indefinite useful life.
During the year ended December 31, 2024, and 2023, the Company recorded amortization expenses related to intangible assets of $817,500 and $120,569, respectively. This amortization expense is related to the WFI tradename and WFI noncompetition agreements.
Goodwill has an indefinite useful life and is therefore not amortized. The Company reviewed and found no indicators for impairment of the intangible assets related to the acquisition of Wisconsin Fertility Institute as of December 31, 2024.
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.