Lifeway Foods, Inc. Goodwill & Intangibles Disclosure
Note 5 – Goodwill and Intangible Assets
Goodwill
Goodwill consisted of the following:
| Total | ||||
| Balance at December 31, 2024 | ||||
| Goodwill | $ | 12,948 | ||
| Accumulated impairment losses | (1,244 | ) | ||
| $ | 11,704 | |||
| Balance at December 31, 2025 | ||||
| Goodwill | $ | 12,948 | ||
| Accumulated impairment losses | (1,244 | ) | ||
| $ | 11,704 | |||
The Company performed an annual Step 1 impairment assessment for its single reporting unit as of December 31, 2025 and an annual Step 0 impairment assessment for its single reporting unit as of December 31, 2024, noting no impairment loss.
Approximately $1,664 of goodwill is deductible for income tax purposes.
Intangible Assets
The gross carrying amounts and accumulated amortization of intangible assets consisted of the following:
| Schedule of other intangible assets | ||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Gross | Net | Gross | Net | |||||||||||||||||||||
| Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | |||||||||||||||||||
| Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||
| Recipes | $ | 44 | $ | (44 | ) | $ | – | $ | 44 | $ | (44 | ) | $ | – | ||||||||||
| Customer lists and other customer related intangibles | 4,529 | (4,529 | ) | – | 4,529 | (4,529 | ) | – | ||||||||||||||||
| Customer relationship | 3,385 | (1,692 | ) | 1,693 | 3,385 | (1,532 | ) | 1,853 | ||||||||||||||||
| Brand names | 7,948 | (3,823 | ) | 4,125 | 7,948 | (3,443 | ) | 4,505 | ||||||||||||||||
| Formula | 438 | (438 | ) | – | 438 | (438 | ) | – | ||||||||||||||||
| Total intangible assets, net | $ | 16,344 | $ | (10,526 | ) | $ | 5,818 | $ | 16,344 | $ | (9,986 | ) | $ | 6,358 | ||||||||||
Estimated amortization expense on intangible assets for the next five years is as follows:
| Year | Amortization | |||
| 2026 | $ | 540 | ||
| 2027 | $ | 540 | ||
| 2028 | $ | 540 | ||
| 2029 | $ | 540 | ||
| 2030 | $ | 540 | ||
The weighted-average remaining amortization expense period for the customer relationship and brand name intangible assets is 10.6 and 10.9 years, respectively, as of December 31, 2025. The weighted-average remaining amortization expense period for total intangible assets is 10.8 years as of December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 17, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 20, 2024 | |
| 2022 | Mar 27, 2023 | |
| 2021 | Jul 21, 2022 | |
| 2020 | Mar 25, 2021 | |
| 2019 | Apr 14, 2020 | |
| 2018 | Apr 15, 2019 | |
| 2017 | Mar 30, 2018 | |
| 2016 | Apr 10, 2017 | |
| 2015 | Mar 16, 2016 | |
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.