Goodwill

12 Months Ended

Apr. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

NOTE 7 – GOODWILL

On April 30, 2012, the Company’s acquisition of DTS8 Holdings resulted in recording of goodwill of $4,402,737. As detailed in ASC 350 “Intangibles-Goodwill”, the Company tests for goodwill impairment at end of its fiscal year and whenever events or changes in circumstances indicate that the carrying amount of the assets exceeds its fair value and may not be recoverable. On April 30, 2015, in accordance with ASC 350-20-35-3A, the Company performed a test for goodwill impairment. Management completed a qualitative analysis to determine whether it was more likely than not that the fair value of a reporting entity is less than its carrying amount, including goodwill. To complete this review, management followed the steps in ASC 350-20-35-3C to evaluate the fair value of the goodwill. As part of management’s review of the goodwill and on the understanding that examples included in ASC 350-20-35-3C are not exhaustive lists of items that should be considered, management considered all known events, and circumstances that could trigger an impairment of goodwill. Management concluded that events rose indicating impairment of the goodwill during the years ended April 30, 2015. The general economic conditions in Shanghai, China, are considered positive. However, the events indicating impairment included the Company’s inability to raise large public or private equity financing in the United States. The Company’s ability to access capital to fund its business operations remained weak and challenging during the years ended April 30, 2015. The differing cultures, consumer preferences, corruption, anti-Chinese sentiments, diverse uncertain government regulations, tax systems and currency regulations are business risks impacting the Company’s current operations. In addition, there are no assurance that the Company will be able to obtain additional new license, permits or other approvals on a cost-effective basis or in a timely manner to prevent disruption to its business and operations in Huzhou and Shanghai, China. In addition, the Company has limited revenue and accumulated losses. It requires working capital to fund its business, and be successful in generating increased revenue. Accordingly, based on a qualitative assessment it is more likely than not that the fair value of the reporting unit is less than its carrying amount of the goodwill. Management carried the second step of the impairment testing procedure. It included determining the recoverable amount, book value and fair value of the reporting unit. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. The impairment review is highly judgmental and involves the use of significant estimates and assumptions. These estimates and assumptions have a significant impact on the amount of any impairment charge recorded. Discounted cash flow methods are dependent upon assumptions of future sales trends, market conditions and cash flows of each reporting unit over several years. Actual cash flows in the future may differ significantly from those previously forecasted. Other significant assumptions include growth rates and the discount rate applicable to future cash flows. Based on this evaluation, the recorded goodwill value exceeded the implied value of the goodwill. Accordingly, management recognized $3,010,758 of goodwill impairment loss for the year ended April 30, 2015. It is possible that the assumptions used by management related to the evaluation may change or that actual results may vary significantly from management's estimates.

Changes in the carrying amount of the goodwill for the years ended April 30, 2016 and 2015 are as follows:

April 30, 2014	Goodwill, net of impairment	$	3,010,758
	Impairment charge for the year ended April 30, 2015		(3,010,758)
April 30, 2015	Goodwill, net of impairment	$	-
	Impairment charge for the year ended April 30, 2016		-
April 30, 2016	Goodwill, net of impairment	$	-