Company: KEQU
Filing Date: 2025-07-02
Form Type: 10-K
Source: 0000055529-25-000026
Chunk: 75

Company: KEWAUNEE SCIENTIFIC CORP /DE/
Filing Date: 2025-07-02
Form: 10-K
Item: Item 1A
Chunk 75
---
 does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Acquired Intangible Assets

As described in Note 4 to the financial statements, on November 1, 2024, the Company acquired Nu Aire, Inc. The acquisition was accounted for using the acquisition method of accounting, which requires, among other things, that identifiable assets acquired be recognized at their fair values as of the acquisition date. Such acquired assets included customer relationships and trade names and trademarks, which were valued using valuation models and methods. We identified the Company’s fair value estimate of customer relationships and trade names and trademarks as a critical audit matter. The principal considerations for that determination included the level of subjectivity, judgment, and audit effort involved in evaluating management’s fair value estimates, particularly assumptions related to the forecasted revenues and cash flows, attrition rate, discount rate, and market-based royalty rate. 

The primary procedures we performed to address this critical audit matter included the following:

•We obtained an understanding of management’s process for determining the fair value measurements of customer relationships and trade names and trademarks.

22

•We evaluated forward-looking assumptions, such as the forecasted revenues and cash flows, attrition rate, discount rate, and market-based royalty rate used by management, by performing procedures that included, but were not limited to, comparisons to industry and historical performance data, and sensitivity analysis to assess their reasonableness. 

•Utilizing internal valuation specialists, we evaluated the significant assumptions and methods used in developing the fair value estimates of customer relationships and trade names and trademarks, including:

◦We evaluated the appropriateness of the valuation models and methodologies used by management in making the estimate.  

◦We evaluated the reasonableness of the key assumptions used by management related to the revenue and cash flow projections and attrition. 

◦We developed an independent calculation of the discount rate for comparison with the rate used by management. 

◦We reperformed the calculation of the fair value of customer relationships and trade names and trademarks to test the accuracy of management’s valuation models.

/s/ Forvis Mazars, LLP

We have served as the Company's auditor since 2020.

Atlanta, Georgia

July 2, 2025

23

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended April 30Kewa