Note 6 - Intangible Assets

9 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE 6. INTANGIBLE ASSETS

Intangible assets consisted of the following as of:

	March 31,			June 30,
	201 9			201 8
Brand name	$	1,142,123		$	1,142,122
Domain name		36,913			36,913
Customer relationships		700,252			700,252
Non-compete agreement		274,982			274,982
Recipes and formulas		1,221,601			1,221,601
Total		3,375,871			3,375,870
Less : accumulated amortization		(632,501	)		(380,639	)
Net intangibles	$	2,743,370		$	2,995,231

CUSTOMER RELATIONSHIPS

On

August 11, 2015,

the Company acquired Gourmet Foods. The fair value on the acquired customer relationships was estimated to be

$66,153

and is amortized over the remaining useful life of

10

years. On

June 2, 2016,

the Company acquired Brigadier Security Systems. The fair value on the acquired customer relationships was estimated to be

$434,099

and is amortized over the remaining useful life of

10

years. On

December 18, 2017

the Company’s wholly-owned subsidiary, Kahnalytics, Inc., acquired the assets of Original Sprout LLC. The fair value of the acquired customer relationships was determined to be

$200,000

and is amortized over the remaining useful life of

7

years.

	March 31,			June 30,
	201 9			201 8
Customer relationships	$	700,252			700,252
Less: accumulated amortization		(183,896	)		(124,895	)
Total customer relationships, net	$	516,356			575,357

BRAND NAME

On

August 11, 2015,

the Company acquired Gourmet Foods. The fair value on the acquired brand name was estimated to be

$61,429

and is amortized over the remaining useful life of

10

years. On

June 2, 2016,

the Company acquired Brigadier Security Systems. The fair value on the acquired brand name was estimated to be

$340,694

and is amortized over the remaining useful life of

10

years. On

December 18, 2017

the Company’s wholly-owned subsidiary, Kahnalytics, Inc., acquired Original Sprout LLC. The fair value of the acquired brand name was determined to be

$740,000

and is considered to have an indefinite life. Unlike the brand names of Gourmet Foods and Brigadier Security Systems, Original Sprout is an actual product name and recognized associated brand that is identifiable to consumers of the product and is the basis of the value proposition. That brand name will forever be associated with the product offering unless and until such time in the future as the Company

may

elect to discontinue use of the brand and move towards establishment of an alternate product offering. Therefore, the Company will test for impairment of the brand name “Original Sprout” at each reporting interval with

no

amortization recognized. As of

December 31, 2018

no

impairment was recorded.

	March 31,			June 30,
	201 9			201 8
Brand name	$	1,142,123		$	1,142,122
Less: accumulated amortization		(119,059	)		(88,872	)
Total brand name, net	$	1,023,064		$	1,053,250

DOMAIN NAME

On

August 11, 2015,

the Company acquired Gourmet Foods. The fair value on the acquired domain name was estimated to be

$21,601

and is amortized over the remaining useful life of

5

years. On

June 2, 2016,

the Company acquired Brigadier Security Systems. The fair value on the acquired domain name was estimated to be

$15,312

and is amortized over the remaining useful life of

5

years.

	March 31,			June 30,
	201 9			201 8
Domain name	$	36,913		$	36,913
Less: accumulated amortization		(24,500	)		(18,958	)
Total brand name, net	$	12,413		$	17,955

RECIPES AND FORMULAS

On

August 11, 2015,

the Company acquired Gourmet Foods. The fair value on the recipes was estimated to be

$21,601

and is amortized over the remaining useful life of

5

years. On

December 18, 2017

the Company’s wholly-owned subsidiary, Kahnalytics, Inc., acquired the assets of Original Sprout LLC. The fair value of the acquired recipes and formulas was determined to be

$1,200,000

and is amortized over the remaining useful life of

8

 years.

	March 31,			June 30,
	201 9			201 8
Recipes and formulas	$	1,221,601		$	1,221,601
Less: accumulated amortization		(208,149	)		(92,303	)
Total recipes and formulas, net	$	1,013,452		$	1,129,298

NON-COMPETE AGREEMENT

On

June 2, 2016,

the Company acquired Brigadier Security Systems. The fair value on the acquired non-compete agreement was estimated to be

$84,982

and is amortized over the remaining useful life of

5

years. On

December 18, 2017

the Company’s wholly-owned subsidiary, Kahnalytics, Inc., acquired the assets of Original Sprout LLC. The fair value of the acquired non-compete agreement was determined to be

$190,000

and is amortized over the remaining useful life of

5

years.

	March 31,			June 30,
	201 9			201 8
Non-compete agreement	$	274,982		$	274,982
Less: accumulated amortization		(96,897	)		(55,612	)
Total non-compete agreement, net	$	178,085		$	219,370

AMORTIZATION EXPENSE

The total intangible amortization expense for the

three

and

nine

months ended

March 31, 2019

was

$82,728

and

$251,861,

respectively, as compared to

$71,992

and

$131,948,

respectively, for the

three

and

nine

months ended

March 31, 2018.

Estimated amortization expenses of intangible assets for the next

five

fiscal years, are as follows:

Years Ending June 30,	Expense
2019	$	83,647
2020		335,508
2021		325,678
2022		306,809
2023		286,508
Thereafter		1,405,220
Total	$	2,743,370