| Note 3 – Discontinued Operations – Sale of Consumer Segment |
Note 3 – Discontinued
Operations – Sale of Consumer Segment
In November 2022, the Company
agreed to the sale of its Consumer segment consisting of Rotor Riot, (“RR”), and Fat Shark Holdings (“FS”). The
closing of the transaction is subject to the successful initial public offering by the buyer, Unusual Machines, Inc. The Company has
concluded that the transaction is presently likely to close within the next twelve months. Accordingly, the Consumer segment has been
classified as Discontinued Operations and reported in accordance with the applicable accounting standards. See Note 22 for additional
information regarding the transaction. Set forth below are the results of operations for the Consumer segment for:
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Three months ended
October 31,
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Six months ended
October 31,
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2023 |
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2022 |
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2023 |
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2022 |
| Revenues |
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$ |
1,056,932 |
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$ |
782,850 |
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$ |
2,926,151 |
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$ |
2,725,570 |
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| Cost of goods sold |
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1,154,200 |
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673,046 |
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2,539,316 |
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2,340,259 |
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| Gross Margin |
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(97,268 |
) |
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109,804 |
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|
386,835 |
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|
385,311 |
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| Operating Expenses |
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| Operations |
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173,825 |
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171,055 |
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383,805 |
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332,838 |
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| Research and development |
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31,054 |
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87,958 |
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77,303 |
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|
170,764 |
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| Sales and marketing |
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287,413 |
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168,013 |
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|
691,517 |
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|
363,291 |
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| General and administrative |
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|
9,982 |
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|
104,323 |
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53,588 |
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|
159,484 |
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| Total operating expenses |
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502,274 |
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531,349 |
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1,206,213 |
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1,026,377 |
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| Operating loss |
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(599,542 |
) |
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(421,545 |
) |
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(819,378 |
) |
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(641,066 |
) |
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| Other (income) expense |
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| Interest expense |
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— |
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— |
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22,856 |
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— |
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| Other, net |
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(31 |
) |
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(8,050 |
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(150 |
) |
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(8,174 |
) |
| Other (income) expense |
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(31 |
) |
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(8,050 |
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22,706 |
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(8,174 |
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| Net loss from discontinued operations |
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$ |
(599,511 |
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$ |
(413,495 |
) |
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$ |
(842,084 |
) |
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$ |
(632,892 |
) |
Assets and liabilities for the Consumer segment included:
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October 31, 2023 |
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April 30, 2023 |
| Current assets |
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| Cash |
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$ |
6,310 |
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$ |
86,656 |
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| Accounts receivable, net |
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44,431 |
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|
61,107 |
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| Inventory |
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2,599,022 |
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3,065,954 |
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| Other |
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1,503,999 |
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2,069,438 |
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| Total current assets |
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4,153,762 |
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5,283,155 |
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| Intangible assets, net |
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20,000 |
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20,000 |
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| Other |
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3,853 |
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3,853 |
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| Operating lease right-of-use assets |
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62,280 |
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84,544 |
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| Total long term assets |
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86,133 |
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108,397 |
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| Current liabilities |
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| Accounts payable |
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$ |
64,777 |
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$ |
606,872 |
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| Accrued expenses |
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96,838 |
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|
109,480 |
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| Debt obligations - short term |
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166,026 |
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— |
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| Customer deposits |
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43,936 |
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|
244,688 |
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| Operating lease liabilities |
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53,060 |
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|
49,461 |
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| Total current liabilities |
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424,637 |
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1,010,501 |
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| Long term liabilities - Operating lease liabilities |
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14,356 |
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|
41,814 |
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| Working capital |
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$ |
3,729,125 |
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$ |
4,272,654 |
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