Safe Pro Group Inc. Goodwill & Intangibles Disclosure
NOTE 6 – INTANGIBLE ASSETS AND GOODWILL
Impairments
During the year ended December 31, 2025, the Company conducted an impairment test of its goodwill and other intangibles due to a decline in operating performance and a sustained decline in its stock price. As part of the analysis, the Company updated the forecasted future cash flows and revenues in the impairment assessment to reflect current conditions. Based on the results of the impairment test performed, the Company recognized a full goodwill impairment charge of $684,867 and another intangibles impairment charge of $146,001 during the year ended December 31, 2025. No impairment charges were recognized during the year ended December 31, 2024.
Intangible assets
As a result of the acquisition of Safe Pro AI on March 9, 2023, there was a $545,625 increase in the gross intangible assets made up of $545,625 of finite lived intangible assets, consisting of a single software asset, SpotlightAI™. Spotlight AI detects threats from drone imagery, relaying precise GPS location and actionable reporting information to decision makers and ground personnel. The Company intends to utilize its AI, ML and computer vision technology to create and analyze large datasets. The Company’s technology is being used in the field by the Ukrainian government, as well as several humanitarian aid organizations.
During the years ended December 31, 2025 and 2024, the Company capitalized $192,545 and $372,588 of its direct costs, respectively. As of December 31, 2025 and 2024, the Company has $834,461 and $1,088,645 of finite lived intangible assets, net, respectively.
As of December 31, 2025, intangible assets subject to amortization consisted of the following:
| December 31, 2025 | ||||||||||||||
| Amortization period (years) | Gross Amount | Accumulated Amortization | Net finite intangible assets | |||||||||||
| Customer relationships | 5 | $ | 388,000 | $ | (388,000 | ) | $ | |||||||
| Contractual employment agreements | 3 | 310,000 | (310,000 | ) | ||||||||||
| Acquired capitalized internal-use software development costs | 3 | 1,110,758 | (276,297 | ) | 834,461 | |||||||||
| $ | 1,808,758 | $ | (974,297 | ) | $ | 834,461 | ||||||||
As of December 31, 2024, intangible assets subject to amortization consisted of the following:
| December 31, 2024 | ||||||||||||||
| Amortization period (years) | Gross Amount | Accumulated Amortization | Net finite intangible assets | |||||||||||
| Customer relationships | 5 | $ | 388,000 | $ | (183,819 | ) | $ | 204,181 | ||||||
| Contractual employment agreements | 3 | 310,000 | (271,337 | ) | 38,663 | |||||||||
| Acquired capitalized internal-use software development costs | 3 | 918,213 | (72,412 | ) | 845,801 | |||||||||
| $ | 1,616,213 | $ | (527,568 | ) | $ | 1,088,645 | ||||||||
For the years ended December 31, 2025 and 2024, amortization of intangible assets amounted to $300,728 and $271,235, respectively. For the year ended December 31, 2025, impairment of intangible assets amounted to $146,001. There were no impairment charges during the year ended December 31, 2024.
SAFE PRO GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
Amortization of intangible assets with finite lives attributable to future periods is as follows:
| Year ending December 31: | Amount | |||
| 2026 | $ | 222,920 | ||
| 2027 | 222,920 | |||
| 2028 | 222,920 | |||
| 2029 | 165,701 | |||
| 2030 and after | ||||
| Total | $ | 834,461 | ||
Goodwill
On December 31, 2025 and 2024, goodwill consisted of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Safe-Pro USA | $ | $ | 518,255 | |||||
| Airborne Response | 166,612 | |||||||
| Total goodwill | $ | $ | 684,867 | |||||
For the year ended December 31, 2025, impairment of goodwill amounted to $684,867.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.