Goodwill and Intangible Assets

6 Months Ended

Dec. 31, 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 December 31, 2021. See Note 2 for details of acquisitions that occurred during the six months ended December 31, 2021, and the year ended June 30, 2021.

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
Acquisition of Interactive Offers		4,848,330
Goodwill as of December 31, 2021	$	8,533,923

During the three and six months ended December 31, 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 the CBD industry and expanded our expertise in 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.

The acquisition of Interactive provided the Company with a technology platform to expand the Company’s product marketing abilities and provided the Company with the expertise in marketing for both internal products and the ability to provide a new service to its current product customer base.  These are the factors of the goodwill recognized in the acquisition.

Intangible assets

Intangible assets as of December 31, 2021:

	Cost		Accumulated Amortization		Net Book Value
Customer relationships	$	4,187,348	$	1,291,057	$	2,896,291
Trade name		1,175,305		378,177		797,128
Non-compete agreements		176,592		74,110		102,482
Intellectual property		1,470,000		76,667		1,393,333
	$	7,009,245	$	1,820,011	$	5,189,234

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 and six months ended December 31, 2021, the Company amortized $417,549 and $667,932, respectively, and for the three and six months ended December 31, 2020, the Company amortized $181,714 and $363,428, 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 and intellectual property are being amortized on a straight-line basis over 5 years. The employee contracts – non competes are being amortized on a straight-line basis over 2 years.

Future amortization of intangible assets are as follows:
June 30, 2022	$	835,096
June 30, 2023		1,606,913
June 30, 2024		1,273,475
June 30, 2025		959,750
June 30, 2026		432,000
Thereafter		82,000
	$	5,189,234