Goodwill and Intangible Assets

3 Months Ended

Sep. 30, 2021

Goodwill and Intangible Assets

Note 5. Goodwill and Intangible Assets

Note 5. Goodwill and Intangible Assets

Goodwill

The following table sets forth activity in goodwill from June 30, 2020, through September 30, 2021. See Note 2 for details of acquisitions that occurred during the three months ended September 30, 2021, and the year ended June 30, 2020.

Goodwill as of June 30, 2020	$	493,095
Acquisition of Infusionz		1,920,718
Goodwill as of June 30, 2021	$	2,413,813
Acquisition of VitaMedica		1,271,780
Goodwill as of September 30, 2021	$	3,685,593

During the three months ended June 30, 2021 and 2020 the Company did not record any impairment of goodwill.

The acquisition of Infusionz LLC and VitaMedica provided the Company with additional expertise in both the CBD industry and the Health and Wellness industry, expanded the branded product offerings of the Company, additional manufacturing resources, additional distribution resources and improved gross margin through synergies recognized with the consolidation of the company’s manufacturing and distribution locations. These are the factors of the goodwill recognized in the acquisitions.

Intangible assets

Intangible assets as of September 30, 2021:

	Cost		Accumulated Amortization		Net Book Value
Customer relationships	$	3,419,348	$	1,029,346	$	2,390,002
Trade name		1,055,305		319,413		735,892
Employment contracts – non-compete		126,593		52,037		74,556
Intellectual property		20,000		1,667		18,333
	$	4,621,246	$	1,402,463	$	3,218,783

Intangible assets as of June 30, 2021:

	Cost		Accumulated Amortization		Net Book Value
Customer relationships	$	2,075,347	$	843,636	$	1,231,711
Trade name		845,305		270,147		575,158
Non-compete agreements		76,592		38,295		38,297
	$	2,997,244	$	1,152,078	$	1,845,166

For the three months ended September 30, 2021 and 2020, the Company amortized $250,383 and $209,872, respectively, related to the customer list and trade name intangible asset. The customer list is being amortized on a straight-line basis over 4 years. The trade names are being amortized on a straight-line basis over 5 years. The employee contracts – non compete are being amortized on a straight-line basis over 2 years. 

Future amortization of intangible assets are as follows:
June 30, 2022	$	854,395
June 30, 2023		1,075,913
June 30, 2024		761,225
June 30, 2025		453,750
June 30, 2026		70,000
Thereafter		3,500
	$	3,218,783