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Item 1A. Risk Factors
We are subject to various risks and uncertainties in the course of our business. For a discussion of such risks and uncertainties, please see the section in the 20245 Annual Report filed with the SEC on November 5March 31, 20256 titled Risk Factors. There have been no material changes to the risk factors disclosed therein, except as noted below.
If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results.
Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations. At September 30, 2025, we had approximately $30.2 million of goodwill on the accompanying Condensed Consolidated Balance Sheet. We assess goodwill for impairment at least annually, and more frequently if events or circumstances indicate it is more likely than not that the our carrying amount may not be recoverable.
Goodwill may be impaired if there are adverse changes in expected future cash flows of a reporting unit, we restructure or dispose of a portion of our business or there are sustained negative trends in our industry or the economy. Our most recent impairment analysis was performed as of December 31, 2024, using information that was known or knowable as of that date, and no impairment was identified. However, as management prepares the forecast and performs the annual quantitative impairment assessment as of December 31, 2025, as of the date of this Form 10-Q, we believe it is likely that some or all of our goodwill could be impaired as of December 31, 2025.
Goodwill is particularly sensitive to changes in financial performance and liquidity and broader industry conditions. Factors that could materially reduce our fair value include (i) a failure of financial results, including revenue growth, to meet our expectations, (ii) continued operating losses or reductions in our cash position from funding ongoing operations, and (iii) changes in discount rates or other valuation assumptions. As a result, some or all of our goodwill recorded on the accompanying Condensed Consolidated Balance Sheet may be impaired as of December 31, 2025 or in future periods..