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Note 5 - Intangible Assets
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Mar. 31, 2015
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Note 5: Intangible Assets
On January 1, 2015 we completed our reacquisition and termination of our regional developer rights and three licenses for undeveloped franchises for the Los Angeles County, California region in exchange for cash consideration of $507,500. At the time of the transaction, we carried a deferred revenue balance of $174,000, representing license fees collected upon the execution of the regional developer agreements. In accordance with ASC 952-605, we accounted for the development rights associated with the undersold or undeveloped franchises as a cancellation, and the respective deferred revenue was netted against the aggregate purchase price. The remaining $333,500 was accounted for as consideration paid for the reacquired development rights.
On January 23, 2015 we completed our reacquisition and termination of our San Diego regional developer rights in exchange for cash consideration of $400,000. At the time of the transaction, we carried a deferred revenue balance of $94,250, representing license fees collected upon the execution of the regional developer agreements. In accordance with ASC 952-605, we accounted for the development rights associated with the undersold or undeveloped franchises as a cancellation, and the respective deferred revenue was netted against the aggregate purchase price. The remaining $305,750 was accounted for as consideration paid for the reacquired development rights.
On March 20, 2015 we completed our reacquisition and termination of our New Jersey regional developer rights in exchange for cash consideration of $145,000. At the time of the transaction, we carried a deferred revenue balance of $304,500, representing license fees collected upon the execution of the regional develop agreements. In accordance with ASC 952-605, we accounted for the cash consideration paid as a cancellation of the development rights associated with the undersold or undeveloped franchises, and netted this amount against the respective deferred revenue. The excess deferred regional developer fees revenue was recognized as revenue at the date of the agreement as no further performance obligations exist.
Intangible assets which remain subject to adjustment upon receipt of final valuation information, consisted of the following:
Amortization expense was $36,667 and $0 for the three months ended March 31, 2015and 2014, respectively.
Estimated amortization expense for 2015 and subsequent years is as follows:
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