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Note 8 – Intangible Assets

3 Months Ended

Jul. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Note 8 – Intangible Assets

Intangible assets relate to acquisitions completed by the Company, including those described in Note 1. Intangible assets were as follows:


	July 31, 2023							April 30, 2023
	Gross Value		Accumulated Amortization			Net Value		Gross Value		Accumulated Amortization			Net Value
Proprietary technology	$	4,967,000	$	(1,050,448	)	$	3,916,552	$	4,967,000	$	(841,223	)	$	4,125,777
Non-compete agreements		81,000		(63,417	)		17,583		81,000		(56,667	)		24,333
Customer relationships		39,000		(19,499	)		19,501		39,000		(18,106	)		20,894
Total finite-lived assets		5,087,000		(1,133,364	)		3,953,636		5,087,000		(915,996	)		4,171,004
Brand name		3,152,000		—			3,152,000		3,152,000		—			3,152,000
Total indefinite-lived assets		3,152,000		—			3,152,000		3,152,000		—			3,152,000
Total intangible assets, net	$	8,239,000	$	(1,133,364	)	$	7,105,636	$	8,239,000	$	(915,996	)	$	7,323,004

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 July 31, 2023, expected amortization expense for finite-lived intangible assets for the next five years is as follows:

Fiscal Year Ended:
	2024	$	649,437
	2025		842,471
	2026		815,271
	2027		786,679
	2028		644,833
	Thereafter		214,945
	Total	$	3,953,636

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
April 2023 - Impairment loss	Skypersonic		(2,826,918	)
Balance at April 30, 2023 and July 31, 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, (ii) its consolidation into Teal, (iii) our current expectations of its future business conditions and trends, including its projected revenues, expenses, and cash flows, the Company recognized an impairment charge of $2,826,918 in April 2023.