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6. INTANGIBLE ASSETS

12 Months Ended

Sep. 30, 2017

On April 13, 2015, BPU acquired from BPUNY certain assets, including the trademark "Beauty & Pin Ups" and its variants and certain other intellectual property and assumed $277,500 of BPUNY's accounts payable to its product vendor, which was paid off in April 2016.

On January 6, 2017, the Company acquired 51% ownership in I’M1 from I’M1 Holdings. I’M1’s assets include the trademark "I’M1” and its variants and certain other intellectual property. Specifically, a licensing agreement with kathy ireland® Worldwide and an advisory agreement for services with kathy ireland® Worldwide. The licensing agreement provides the rights to use of the tradename for business and licensing purposes, this is the baseline of the business and will be required as long as the business is operating. Our capability for renewals of these agreements are extremely likely as the agreements are with a related party. We also believe the existence of this agreement does not have limits on the time it will contribute to the generation of cash flows for I’M1 and therefore we have identified these as indefinite-lived intangible assets.

On January 6, 2017, the Company acquired 51% ownership in EE1 from EE1 Holdings. EE1’s assets include the trademark "EE1” and its variants and certain other intellectual property. Specifically, a production deal agreement with BMG Rights Management US and an advisory agreement for services with kathy ireland® Worldwide. We believe the production deal agreement and the advisory agreement do not have limits on the time they will contribute to the generation of cash flows for EE1 and therefore we have identified these as indefinite-lived intangible assets.

On September 8, 2017, the Company entered into a seven year wholesale license agreement with Andre Carthen and issued 45,500 shares of common stock, valued at $179,725. In addition, the Company agreed to pay $65,000 in cash within 30 days completion of its initial public offering and also issued warrants to purchase 45,500 shares of common stock at a strike price of $4.00. The warrants were valued at $65,338. We are amortizing the capitalized value of the cash, warrants and common stock over the seven year term of the agreement and have amortized $2,917 for the year ending September 30, 2017. Under the terms of this nonexclusive agreement, we have the right to use, assign and sublicense the marks, intellectual property and other rights in connection with "Chef Andre," "Andre Carthen," ACafe" or "Fit Chef" and all trade names, trademarks and service marks related to this intellectual property for the purpose of entering into sublicense agreements with third parties for the manufacture, marketing and sale of products utilizing these marks.

On September 8, 2017, the Company entered into a seven year wholesale license agreement with Nicholas Walker and issued 25,000 shares of common stock, valued at $98,750. In addition, the Company agreed to pay $40,000 in cash within 30 days completion of its initial public offering and also issued warrants to purchase 25,000 shares of common stock at a strike price of $4.00. The warrants were valued at $35,900. We are amortizing the capitalized value of the cash, warrants and common stock over the seven year term of the agreement and have amortized $1,603 for the year ending September 30, 2017. Under the terms of this nonexclusive agreement, we have the right to use, assign and sublicense the marks, intellectual property and other rights in connection with "Jardin," "Nicholas Walker," "Nicholas Walker Jardin," "Nicholas Walker Garden Party," "Cultivated by Nicholas Walker," and "Jardin Du Jour," and all trade names, trademarks and service marks related to this intellectual property for the purpose of entering into sublicense agreements with third parties for the manufacture, marketing and sale of products utilizing these marks.

In September 2017, the Company acquired an exclusive seven year license agreement with kathy ireland® Worldwide for the right to license the mark, intellectual property and other marks in connection with kathy ireland® Health & Wellness. The agreement is for seven years for a purchase price of $840,000. The Company has an option to extend for another three years for an additional price of $360,000. The license and associated intellectual property is being amortized over the term of the agreement and we have amortized $10,000 for the year ending September 30, 2017. Per the agreement, $480,000 is to be paid prior to January 1, 2018, and this amount was included in accrued expenses, related party at September 30, 2017. The remaining amount of $360,000 are due in equal installments on January 1 of subsequent years until the purchase price is paid, and are classified as long term liabilities, related party as of the year ended September 30, 2017. Under this license agreement with kathy ireland® Worldwide we were granted an exclusive, royalty free right to license, assign and use the kathy ireland® Health & Wellness™ trademark, and all trade names, trademarks and service marks related to the intellectual property including any derivatives or modifications, goodwill associated with this intellectual property when used in conjunction with health and wellness as well as Ms. Ireland's likeness, videos, photographs and other visual representations connected with kathy ireland® Health & Wellness™.

Intangible assets as of September 30, 2017 and 2016 consisted of the following:

	2017		2016
Trademark and other intellectual property related to BPU	$	486,760	$	486,760
Trademark and other intellectual property related to I’M1		971,667		—
Trademark and other intellectual property related to EE1		471,667		—
Trademark, tradename and other intellectual property related to kathy ireland® Health & Wellness, net		830,000		—
Cash, warrants and stock issued related to the Wholesale license agreement with Chef Andre Carthen, net		307,146		—
Cash, warrants and stock issued related to the Wholesale license agreement with Nicholas Walker, net		173,047		—
Total	$	3,240,287		486,760

In September 2017 the Company acquired three definite lived intangible assets, all with a seven year life.

Future amortization schedule:

Intangible	Total unamortized cost		2018		2019		2020		2021		2022		thereafter
Trademark, tradename and other intellectual property related to kathy ireland® Health & Wellness	$	830,000	$	120,000	$	120,000	$	120,000	$	120,000	$	120,000	$	230,000
Cash, warrant and stock issued related to the Wholesale license agreement with Chef Andre Carthen	$	307,146	$	44,294	$	44,294	$	44,294	$	44,294	$	44,294	$	85,676
Cash, warrant and stock issued related to the Wholesale license agreement with Nicholas Walker	$	173,047	$	24,950	$	24,950	$	24,950	$	24,950	$	24,950	$	48,297

The Company performs an impairment analysis at August 1 annually on the indefinite-lived intangible assets following the steps laid out in ASC 350-30-35-18. Our annual impairment analysis includes a qualitative assessment to determine if it is necessary to perform the quantitative impairment test. In performing a qualitative assessment we review events and circumstances that could affect the significant inputs used to determine if the fair value is less than the carrying value of the intangible assets. In addition, intangible assets will be tested on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred and the Company evaluates the indefinite-lived intangible assets each reporting period to determine whether events and circumstances continue to support an indefinite useful life. The Company has performed a qualitative and quantitative analysis and for the years ended September 30, 2017 and 2016 there has been no impairment.

The Company performs an impairment analysis at August 1 annually on the definite lived intangible assets following the steps laid out in ASC 360-10-35-21. We first assess if there is an indicator of possible impairment such as change in the use of the asset, market price changes in the asset, or other events that impact the value of the asset. If an indicator is present we then perform a quantitative analysis to determine if the carrying amount of the asset is recoverable. This is done by comparing the total undiscounted future cash flows of the long-lived asset to its carrying amount. If the total undiscounted future cash flows exceed the carrying amount of the asset, the carrying amount is deemed recoverable and an impairment is not recorded. If the carrying amount of a long-lived asset is deemed to be unrecoverable, an impairment loss needs to be estimated. In order to calculate the impairment loss, the Fair Value of the asset must be determined. Fair Value referenced here is determined using the guidance in FASB ASC Topic 820. After assessing indicators for impairment, the Company determined that a quantitative analysis was not needed as of September 30, 2017.