The Joint Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Intangible Assets

Note 8 - Intangible Assets

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note

Intangible Assets

July 26, 2018,

the Company entered into an agreement under which it repurchased the regional development rights to develop franchises in Las Vegas, Nevada. The total consideration for the transaction was

$278,250,

paid in cash.

The Company carried a deferred revenue balance associated with these transactions of

$26,934,

representing license fees collected upon the execution of the regional developer agreements. The Company accounted for the termination of development rights associated with unsold or undeveloped franchises as a cancellation, and the associated deferred revenue was netted against the aggregate purchase price.

Intangible assets consist of the following:

	As of September 30, 2018
	Gross Carrying		Accumulated		Net Carrying
	Amount		Amortization		Value
Amortized intangible assets:
Reacquired franchise rights	$	1,758,000	$	854,011	$	903,989
Customer relationships		745,000		711,999		33,001
Reacquired development rights		1,413,316		584,984		828,332
	$	3,916,316	$	2,150,994	$	1,765,322

	As of December 31, 2017
	Gross Carrying		Accumulated		Net Carrying
	Amount		Amortization		Value
Amortized intangible assets:
Reacquired franchise rights	$	1,673,000	$	657,943	$	1,015,057
Customer relationships		701,000		674,667		26,333
Reacquired development rights		1,162,000		443,348		718,652
	$	3,536,000	$	1,775,958	$	1,760,042

Amortization expense was

$131,262

and

$375,036

for the

three

and

nine

months ended

September 30, 2018,

respectively. Amortization expense was

$128,562

and

$450,315

for the

three

and

nine

months ended

September 30, 2017,

respectively.

Estimated amortization expense for

2018

and subsequent years is as follows:

2018 (remainder)	$	131,262
2019		525,048
2020		508,551
2021		437,830
2022		150,418
Thereafter		12,213
Total	$	1,765,322