Annual report pursuant to Section 13 and 15(d)

Intangible Assets and Goodwill

v3.20.4
Intangible Assets and Goodwill
 12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Goodwill Intangible Assets and Goodwill
On November 30, 2020, the Company entered into an Asset and Franchise Purchase Agreement under which the Company repurchased from the seller one operating franchise in Scottsdale, Arizona. The Company operates the franchise as a company-managed clinic. The total purchase price for the transaction was $534,000. The majority of the purchase price consideration was allocated to customer relationship and goodwill, which were assigned fair values of $96,000 and $475,143, respectively.
On December 31, 2020, the Company entered into an agreement under which it repurchased the right to develop franchises in various counties in North Carolina. The total consideration for the transaction was $1,039,500. The Company carried a deferred revenue balance associated with this transaction of $36,781, representing the unrecognized portion of the license fee collected upon the execution of the regional developer agreement. 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 consisted of the following:
December 31, 2020
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Value
Intangible assets subject to amortization:
Reacquired franchise rights $ 3,246,894  $ 2,107,730  $ 1,139,164 
Customer relationships 1,351,975  1,130,800  221,175 
Reacquired development rights 3,053,201  1,548,534  1,504,667 
$ 7,652,070  $ 4,787,064  $ 2,865,006 

December 31, 2019
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Value
Intangible assets subject to amortization:
Reacquired franchise rights $ 3,246,494  $ 1,400,086  $ 1,846,408 
Customer relationships 1,255,975  865,478  390,497 
Reacquired development rights 2,050,481  1,067,595  982,886 
$ 6,552,950  $ 3,333,159  $ 3,219,791 
Amortization expense related to the Company’s intangible assets was $1,453,905 and $1,050,903 for the years ended December 31, 2020 and 2019, respectively.
Estimated amortization expense for 2021 and subsequent years is as follows:
2021 $ 1,713,819 
2022 1,040,666 
2023 90,521 
2024 20,000 
Total $ 2,865,006 

The changes in the carrying amount of goodwill were as follows:


Corporate Clinic Segment
Balance as of December 31, 2019
Goodwill, gross $ 4,205,455 
Accumulated impairment losses (54,994)
Goodwill, net 4,150,461 
2020 acquisition 475,143 
Balance as of December 31, 2020
Goodwill, gross 4,680,598
Accumulated impairment losses (54,994)
Goodwill, net $ 4,625,604