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Note 1 - The Business (Tables) | 3 Months Ended
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Jul. 31, 2021
Accounting Policies [Abstract] |
summary of the purchase price and its related allocation | Following the closing, the Company's management controlled the operating decisions of the combined company. Accordingly, we accounted for the transaction as an acquisition of Rotor Riot by the Company. Based on purchase price accounting, we recognized the assets and liabilities of Rotor Riot at fair value with the excess of the purchase price over the net assets acquired recognized as goodwill. The table below reflects the acquisition date values of the purchase consideration, assets acquired, and liabilities assumed. The shares issued were valued at $1,820,114 (2,219,650 shares issued times $0.82 per share which equaled the closing price of the Company's common stock on the date that the merger agreement was consummated). A summary of the purchase price and its related allocation is as follows:
| I. | Purchase Price
Shares issued |  | $ | 1,820,114 |
Promissory note issued |  |  | 175,000 |
Total Purchase Price |  | $ | 1,995,114 |
| II. | Purchase Price Allocation
Assets Acquired |  |
Cash |  | $ | 21,623 |
Accounts receivable |  |  | 28,500 |
Other assets |  |  | 3,853 |
Inventory |  |  | 127,411 |
Trademark |  |  | 20,000 |
Brand name |  |  | 578,000 |
Customer relationships |  |  | 39,000 |
Goodwill |  |  | 1,756,023 |
Total assets acquired |  | $ | 2,574,410 |
Liabilities Assumed |  |  |  |
Accounts payable and accrued expenses |  | $ | 171,651 |
Notes payable |  |  | 209,799 |
Due to related party |  |  | 197,846 |
Total liabilities assumed |  |  | 579,296 |
Net assets acquired |  | $ | 1,995,114 |
summary of the purchase price and its related allocation | In November 2020, the Company closed a share purchase agreement ("Share Purchase Agreement") with the sole shareholder of Fat Shark Holdings ("Fat Shark"), to acquire all of the issued and outstanding shares of Fat Shark and its subsidiaries. The transaction was valued at $8,354,076 based on (i) the issuance of 5,227,273 shares of common stock with a value of $6,351,076 on the date of closing (ii) a senior secured promissory note in the original principal amount of $1,753,000 which matures on November 1, 2023, and (iii) a cash payment of $250,000. The Share Purchase Agreement includes indemnification provisions, a two year non-compete agreement, and registration rights for the shares issued in the transaction. A summary of the purchase price and its related allocation is as follows:
| I. | Purchase Price
Shares issued |  | $ | 6,351,076 |
Promissory note issued |  |  | 1,753,000 |
Cash |  |  | 250,000 |
Total Purchase Price |  | $ | 8,354,076 |
| II. | Purchase Price Allocation
Assets Acquired |  |
Cash |  | $ | 201,632 |
Accounts receivable |  |  | 249,159 |
Other assets |  |  | 384,232 |
Inventory |  |  | 223,380 |
Brand name |  |  | 1,144,000 |
Proprietary technology |  |  | 272,000 |
Non-compete agreement |  |  | 16,000 |
Goodwill |  |  | 6,168,260 |
Total assets acquired |  | $ | 8,658,663 |
Liabilities Assumed |  |  |  |
Accounts payable and accrued expenses |  | $ | 279,393 |
Customer deposits |  |  | 25,194 |
Total liabilities assumed |  |  | 304,587 |
Net assets acquired |  | $ | 8,354,076 |
preliminary summary of the purchase price and its related allocation | In February 2021, the Company entered into Share Purchase and Liquidity Event Agreements (the "Skypersonic Agreements") with the founder and majority shareholder of Skypersonic, Inc., ("Skypersonic") and the holders of common stock and equity based agreements representing 97.46% of Skypersonic (the "Sellers"), pursuant to which, subject to the satisfaction of certain closing conditions, the Company would acquire all of the issued and outstanding share capital of Skypersonic for an aggregate of $3,000,000 in shares (the "Share Consideration") of the Company's common stock, based upon the VWAP of the Company's common stock at closing of the transaction (the "Skypersonic Transaction"). Prior to the closing, the Company provided $75,000 to fund operating costs of Skypersonic. This amount was capitalized as part of the purchase price. The transaction closed on May 7, 2021 and was paid through the issuance of 857,124 shares of common stock which had a fair market value of $3,291,356. Fifty (50%) percent of the Share Consideration (the "Escrow Shares") was deposited in an escrow account for a period of twelve (12) months as security for indemnification obligations and any purchase price adjustments due to working capital deficiencies and any other claims or expenses arising under the Skypersonic Agreements. Under the Skypersonic Agreements, closing date working capital deficits in excess of $300,000 shall result in a reduction of the Share Consideration on a dollar of dollar basis. As of July 31, 2021, the Company has completed a preliminary determination of the working capital deficit to be $989,848 which would result in a reduction in the purchase price of $689,848. The Company has reflected the required adjustments in the financial statements as of July 31, 2021 and for the three months then ended, including a 171,801 reduction in the number of shares to be issued. The Company and the Sellers have agreed to finalize the calculation by the end of September 2021. A preliminary summary of the purchase price and its related allocation is as follows:
| I. | Purchase Price
Shares issued |  | $ | 2,631,640 |
Cash |  |  | 75,000 |
Total Purchase Price |  | $ | 2,706,640 |
| II. | Purchase Price Allocation
Assets Acquired |  |
Cash |  | $ | 13,502 |
Accounts receivable |  |  | 51,083 |
Other assets |  |  | 12,950 |
Inventory |  |  | 50,556 |
Goodwill |  |  | 3,633,546 |
Total assets acquired |  | $ | 3,761,637 |
Liabilities Assumed |  |  |  |
Accounts payable and accrued expenses |  | $ | 1,054,997 |
Total liabilities assumed |  |  | 1,054,997 |
Net assets acquired |  | $ | 2,706,640 |

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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=123413009&loc=d3e4845-128472 + Details
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