Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets
12 Months Ended
Oct. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets



Goodwill and Other Intangible Assets are evaluated on an annual basis. If there is reason to believe that their values have been diminished or impaired, those write-downs will be included in results from operations.


The identifiable goodwill and intangible assets acquired and their carrying value as of October 31, 2020 and 2019, are as follows:


Amortization of patents, customer relationships, non-compete agreements and licenses included as a charge to income amounted to $44,642 and $39,689 for the years ended October 31, 2020 and 2019, respectively. Goodwill is not being amortized.


    October 31, 2020     October 31, 2019  
Customer relationships (weighted average life of 10 years)   $ 720,592     $ 720,592  
Non-compete agreements (weighted average life of 3 years)     198,911       198,911  
Patents and other (weighted average life of 10 years)     472,173       381,785  
Total identifiable intangible assets - gross carrying value     1,391,676       1,301,288  
Less: accumulated amortization     (1,042,332 )     (1,070,505 )
Total intangible assets, net   $ 349,344     $ 230,783  


Future estimated annual amortization expenses as of October 31, 2020 as follows:


Years Ending October 31,   Amount  
2021     46,338  
2022     46,317  
2023     43,978  
2024     33,000  
2025     19,409  
Thereafter     160,302  
Totals   $ 349,344  


As a result of the acquisitions of Coda Octopus Martech, Ltd., Coda Octopus Colmek, Inc. and Coda Octopus Products, Ltd., the Company has goodwill in the amount of $3,382,108 as of October 31, 2020 and 2019, respectively. We enlisted the assistance of an independent valuation consultant to determine the values of our goodwill and intangible assets at the dates of acquisition and by management for the dates thereafter. The carrying amount of goodwill as of October 31, 2020 and 2019, respectively, are recorded below:


    October 31, 2020     October 31, 2019  
Breakout of Goodwill:                
Coda Octopus Colmek, Inc.   $ 2,038,669     $ 2,038,669  
Coda Octopus Products, Ltd     62,315       62,315  
Coda Octopus Martech, Ltd     1,281,124       1,281,124  
Total Goodwill   $ 3,382,108     $ 3,382,108  


Considerable management judgment is necessary to estimate the fair value of goodwill. Based on various market factors and projections used by management, actual results could vary significantly from management’s estimates.


The Company’s policy is to test its goodwill balances for impairment on an annual basis, in the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that the asset might be impaired.


Based on these evaluations, the fair value of reporting unit exceeds its carrying value. As such no impairment was recorded by management.