Company: CSTL
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001447362-25-000031
Chunk: 44

Company: CASTLE BIOSCIENCES INC
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 44
---
 we revised our commercial strategy for the IDgenetix test, reallocating resources to inside sales and non-personal promotions. In December 2024, we observed month-to-month decreases in IDgenetix test reports, which persisted through year-end. We continue to offer the IDgenetix test and monitor its performance; nevertheless, we anticipate that test report volumes and net revenues will decrease in 2025. Long-term projections about the performance of this test remain uncertain. We believe these factors indicated a need to revise the remaining useful life of our IDgenetix developed technology intangible asset. On December 1, 2024, we adjusted the estimated remaining useful life from approximately 12 years to 13 months, with the useful life now expected to end on December 31, 2025.

Goodwill

Our goodwill is not amortized but is tested for impairment annually and whenever events or changes in circumstances indicate that it may be impaired. We perform annual impairment reviews of our goodwill balance during the fourth quarter of each year, or more frequently if management believes indicators of impairment exist. We may perform a qualitative assessment to determine if it is necessary to perform a quantitative impairment test. If we determine that a quantitative impairment test is necessary, we apply the guidance in Accounting Standards Update (“ASU”) No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, by comparing the fair value of the reporting unit to its carrying value, including the goodwill. If the carrying value exceeds the fair value, we recognize an impairment loss for the amount by which the carrying value exceeds fair value, up to the total amount of goodwill allocated to the reporting unit. We did not incur any goodwill impairment losses in any of the periods presented. We have concluded that our business is comprised of a single reporting unit. For our annual impairment test for the year ended December 31, 2024, we elected to bypass the qualitative assessment and proceeded directly to the quantitative assessment by comparing our reporting unit’s fair value to its 

93

carrying value. Factors that could result in an impairment of goodwill in the future include declines in the price of our common stock, increased competition, changes in macroeconomic developments and unfavorable government or regulatory developments. 

We conducted annual impairment testing of goodwill in the fourth quarter which indicated that the fair value of our reporting unit exceeded its carrying value by 117% and therefore no impairment was indicated. To measure the fair value of our single reporting