OODWILL AND INTANGIBLE ASSETS

During the

three

months ended

March 31, 2018,

the Company recorded intangible assets of

$1,850,000

and goodwill of

$2,603,687

in connection with the acquisition of Genasys, as described in Note

Identifiable intangible assets are amortized over their useful lives based upon a number of assumptions including the estimated period of economic benefit and utilization. The Company will assess the impairment of identifiable amortized intangible assets when events and circumstances indicate the carrying value of the assets might

not

be recoverable.

The goodwill attributable to the acquisition of Genasys is due to combining the mass messaging solutions and software development capabilities with existing LRAD products for enhanced offerings and the skill level of the acquired workforce. The Company will continue to analyze the transaction and refine its calculations, as appropriate during the measurement period, which could affect the value of goodwill. Subsequent to the measurement period, the Company will periodically review goodwill for impairment in accordance with ASC Topic

350

“

ntangibles – Goodwill and Other – Testing Indefinite-Lived Assets for Impairment

”.

The Company’s intangible assets consist of the following:

	March 31, 2018							September 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Technology	$	690,000	$	(20,536	)	$	669,464	$	-	$	-		$	-
Customer relationships		660,000		(19,642	)		640,358		-		-			-
Trade name portfolio		240,000		(10,000	)		230,000		-		-			-
Non-compete agreements		260,000		(18,056	)		241,944		-		-			-
Patents		108,247		(56,166	)		52,081		108,247		(52,558	)		55,689
	$	1,958,247	$	(124,400	)	$	1,833,847	$	108,247	$	(52,558	)	$	55,689

The amortization expense for the

three

months ended

March 31, 2018

and

2017

was

$70,038

and

$1,859,

respectively. The amortization expense for the

six

months ended

March 31, 2018

and

2017

was

$71,842

and

$3,681,

respectively.

Estimated Future Amortization Expense Years Ended September 30,
2018 (April 1, 2018 through September 30, 2018)	$	166,689
2019		333,771
2020		333,448
2021		271,771
2022		246,363
Thereafter		481,805
Total estimated amortization expense	$	1,833,847