Note 6 - Intangible Assets

12 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

NOTE 6. INTANGIBLE ASSETS

Intangible assets consisted of the following as of June 30, 2023 and June 30, 2022:

	June 30,			June 30,
	2023			2022
Customer relationships	$	1,363,935		$	1,363,935
Brand name		1,297,789			1,297,789
Domain name		36,913			36,913
Recipes		1,221,601			1,221,601
Non-compete agreement		274,982			274,982
Internally developed software		217,990			217,990
Total		4,413,210			4,413,210
Less : accumulated amortization		(2,083,240	)		(1,704,314	)
Net intangibles	$	2,329,970		$	2,708,896

CUSTOMER RELATIONSHIP

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. On July 1, 2020, our wholly-owned subsidiary, Gourmet Foods, acquired Printstock Products Limited. The fair value of the acquired customer relationships was estimated to be $77,123 and is amortized over a useful life of 9 years. On June 20, 2022 our wholly-owned subsidiary, Marygold UK, acquired Tiger Financial and Asset Management Limited. The fair value of the acquired customer relationships was estimated to be $587,328 and is amortized over a useful life of 7 years.

	June 30,			June 30,
	2023			2022
Customer relationships	$	1,363,935			1,363,935
Less: accumulated amortization		(629,568	)		(458,550	)
Total customer relationships, net	$	734,367		$	905,385

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 the assets of 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. That brand name will continue to be associated with the product offering unless and until such time in the future as the Company may elect to discontinue the use of the brand and move towards establishment of an alternative product offering. On July 1, 2020, our wholly-owned subsidiary, Gourmet Foods, acquired Printstock Products Limited. The fair value of the brand name was determined to be $57,842 and, like that of Original Sprout, would continue to stay in use for an indefinite period of time. Therefore, the Company will test for impairment of the brand names "Original Sprout" and "Printstock" at each reporting interval with no amortization recognized. On June 20, 2022 our wholly-owned subsidiary, Marygold UK, acquired Tiger Financial and Asset Management Limited. The fair value of the acquired trade name, $24,456, together with is regulatory business certification, $73,368, totaled $97,824 and, like those of Printstock and Original Sprout, would continue to stay in use for an indefinite period of time. Therefore, the Company will test for impairment at each reporting interval with no amortization recognized.

	June 30,			June 30,
	2023			2022
Brand name	$	1,297,789		$	1,297,789
Less: accumulated amortization		(290,042	)		(249,831	)
Total brand name, net	$	1,007,747		$	1,047,958

DOMAIN NAME

On August 11, 2015, the Company acquired Gourmet Foods, Ltd. 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. As of June 30, 2023 the fair value of the acquired domain names have been fully amortized.

	June 30,			June 30,
	2023			2022
Domain name	$	36,913		$	36,913
Less: accumulated amortization		(36,913	)		(36,913	)
Total domain name, net	$	-		$	-

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. 

	June 30,			June 30,
	2023			2022
Recipes and formulas	$	1,221,601		$	1,221,601
Less: accumulated amortization		(851,735	)		(701,736	)
Total recipes and formulas, net	$	369,866		$	519,865

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. As of June 30, 2023 the fair value of the non-compete agreements have been fully amortized.

	June 30,			June 30,
	2023			2022
Non-compete agreement	$	274,982		$	274,982
Less: accumulated amortization		(274,982	)		(257,284	)
Total non-compete agreement, net	$	-		$	17,698

INTERNALLY DEVELOPED SOFTWARE

During the first quarter of 2020, Marygold began incurring expenses in connection with the internal development of software applications that are planned for eventual integration to its consumer Fintech offering. Certain of these expenses, totaling $217,990 as of June 30, 2023 and June 30, 2022, have been capitalized as intangible assets. Once development has been completed and the product is commercially viable, these capitalized costs will be amortized over their useful lives. As of June 30, 2023, no amortization expense has been recorded for these intangible assets.

AMORTIZATION EXPENSE

The total amortization expense for intangible assets for the years ended  June 30, 2023 and June 30, 2022 was $378,926 and $317,675, respectively.

Estimated amortization expenses of intangible assets for the next five years ending June 30, are as follows:

Years Ending June 30,	Expense
2024	$	361,226
2025		345,962
2026		234,194
2027		92,417
2028		92,417
Thereafter		1,203,754
Total	$	2,329,970