The Joint Corp. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 8 - Intangible Assets

Note 8 - Intangible Assets

12 Months Ended

Dec. 31, 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 consisted of the following:

	As of December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized intangible assets:
Reacquired franchise rights	$	1,758,000	$	921,138	$	836,862
Customer relationships		745,000		717,498		27,502
Reacquired development rights		1,413,316		643,620		769,696
	$	3,916,316	$	2,282,256	$	1,634,060

	As of December 31, 2017
	Gross Carrying Amount		Accumulated Amortization		Net Carrying 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

$506,298

and

$578,880

for the years ended

December 31, 2018

and

2017,

respectively.

Estimated amortization expense for

2019

and subsequent years is as follows:

2019	$	525,048
2020		508,558
2021		437,830
2022		150,411
2023		12,213
Thereafter		–
Total	$	1,634,060