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Note 7 – Intangible Assets

12 Months Ended

Apr. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Note 7 – Intangible Assets

Intangible assets relate to acquisitions completed by the Company, as described in Note 1, and were as follows at April 30:


	2023							2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
Proprietary technology	$	4,967,000	$	(841,223	)	$	4,125,777	$	1,098,000	$	(219,267	)	$	878,733
Non-compete agreements		81,000		(56,667	)		24,333		81,000		(29,667	)		51,333
Customer relationships		39,000		(18,106	)		20,894		39,000		(12,535	)		26,465
Total finite-lived assets		5,087,000		(915,996	)		4,171,004		1,218,000		(261,469	)		956,531
Brand name		3,152,000		—			3,152,000		1,722,000		—			1,722,000
Trademark		20,000		—			20,000		20,000		—			20,000
Total indefinite-lived assets		3,172,000		—			3,172,000		1,742,000		—			1,742,000
Total intangible assets, net	$	8,259,000	$	(915,996	)	$	7,343,004	$	2,960,000	$	(261,469	)	$	2,698,531

Proprietary technology and non-compete agreements are being amortized over five to six years and three years, respectively. Customer relationships are being amortized over seven years. Goodwill and Brand name are not amortized but evaluated for impairment on a quarterly basis.

As of April 30, 2023, expected amortization expense for finite-lived intangible assets for the next five years is as follows:

Fiscal Year Ended:
	2024	$	866,805
	2025		842,471
	2026		815,271
	2027		786,679
	2028		644,833
	Thereafter		214,945
	Total	$	4,171,004

Goodwill represents the future economic benefit arising from other assets acquired in an acquisition that are not individually identified and separately recognized. The composition of, and changes in goodwill, consist of:

Date	Acquisition	Goodwill
January 2020	Rotor Riot	$	1,849,073
November 2020	Fat Shark		6,168,260
May 2021	Skypersonic		2,826,918
August 2021	Teal Drones		8,995,499
Balance at April 30, 2022			19,839,750
Impairment loss	Skypersonic		(2,826,918	)
Balance at April 30, 2023		$	17,012,832

Following the establishment of the Enterprise and Consumer segments, management evaluated the long term business strategy of each segment. This resulted in the Enterprise segment narrowing its focus on the military and other government agencies. It was determined that Skypersonic's technology would be re-focused for the near term on military applications and consolidated into the operations of Teal Drones. The Company completes a formal evaluation of the carrying value of its intangible assets, including goodwill, at the end of each fiscal year. Based on (i) the operating results for Skypersonic since its acquisition in May 2021, (i) its consolidation into Teal, (iii) our current expectations of its future business conditions and trends, and (iv) our projected revenues, expenses, and cash flows related to Skypersonic, the Company completed an assessment of the carrying amount of Skypersonic's goodwill and recognized an impairment charge of $2,826,918.