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Note 1 – The Business (Tables)
 6 Months Ended
Oct. 31, 2022
Accounting Policies [Abstract]  
[custom:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumed3TableTextBlock]
Shares issued  $6,351,076 
Promissory note issued   1,753,000 
Cash   250,000 
Total Purchase Price  $8,354,076 

 

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 
Total assets acquired   2,490,403 
Liabilities assumed     
Accounts payable and accrued expenses   279,393 
Customer deposits   25,194 
Total liabilities assumed   304,587 
Total fair value of net assets acquired   2,185,816 
Goodwill  $6,168,260 
[custom:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumed4TableTextBlock]
Shares issued  $2,716,012 
Cash   75,000 
Total Purchase Price  $2,791,012 

 

Assets acquired   
Cash   13,502 
Accounts receivable   51,083 
Other assets   12,950 
Inventory   50,556 
Proprietary technology   826,000 
Non-compete agreement   65,000 
Total assets acquired   1,019,091 
Liabilities assumed     
Accounts payable and accrued expenses   1,054,997 
Total liabilities assumed   1,054,997 
Total fair value of net assets acquired   (35,906)
Goodwill  $2,826,918 
[custom:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumed5TableTextBlock]
Total Purchase Price – shares issued  $10,011,279 

 

Assets acquired   
Cash   11,364 
Accounts receivable   47,964 
Other current assets   15,085 
Other assets   48,595 
Inventory   1,253,755 
Brand name   1,430,000 
Proprietary technology   3,869,000 
Total assets acquired   6,675,763 
Liabilities assumed     
Accounts payable and accrued expenses   1,143,899 
Customer deposits   1,766,993 
Notes payable   2,749,091 
Total liabilities assumed   5,659,983 
Total fair value of net assets acquired   1,015,780
Goodwill  $8,995,499 
Business Acquisition, Pro Forma Information [Table Text Block]
                               
 

Three months ended October 31, 2021

 

Six months ended October 31, 2021

   Red Cat  Teal  Consolidated  Red Cat  Teal  Consolidated
Revenues  $1,863,239   $104,016   $1,967,255   $3,259,990   $416,063   $3,676,053 
                               
Net Loss  $(2,740,601)  $(301,783)  $(3,042,384)  $(4,298,373)  $(1,467,770)  $(5,766,143)



The acquisition of Skypersonic was completed on May 7, 2021 and its activities during the period from May 1, 2021 to May 7, 2021 were immaterial to the consolidated pro forma results.

 

The unaudited pro forma financial information has been compiled in a manner consistent with the Company's accounting policies, and includes transaction costs, amortization of the acquired intangible assets, and other expenses directly related to each respective acquisition.  The unaudited pro forma financial information is based on estimates and assumptions which the Company believes are reasonable and are not necessarily indicative of the results that would have been realized had the acquisitions closed on the dates indicated in the tables, nor are they indicative of results of operations that may occur in the future.

 

Other information related to the Company’s acquisitions include:

 

  • The purchase price allocation has been finalized for each acquisition based on the report from the valuation services firm engaged to assist in the identification and valuation of intangible assets acquired.

 

  • The fair value of shares issued by the Company as part of the consideration paid is normally based on the volume weighted average price of the Company’s common stock for the twenty days prior to the closing of the transaction.  For accounting purposes, the shares issued are valued based on the closing stock price on the date that the transaction closes.

 

  • Goodwill for Rotor Riot relates to its strong social media presence including more than 200,000 YouTube subscribers. Goodwill for Fat Shark is attributable to its relationship with manufacturing sources in China and the potential to integrate its goggle technologies with the Teal drone.  Goodwill for Skypersonic relates to the future customers expected to leverage its “Fly Anywhere” technologies in a wide range of commercial environments.  Goodwill for Teal is ascribed to its existing relationship with several U.S. government agencies including its classification as an approved vendor.

 

  • The Company expects that the Goodwill recognized in each transaction will be deductible for tax purposes.  The Company has reported net losses since its inception and is presently unable to determine when and if the tax benefit of this deduction will be realized.