Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Intangible Assets

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Note 8 - Intangible Assets
 9 Months Ended
Sep. 30, 2019
Notes to Financial Statements  
Intangible Assets Disclosure [Text Block]
Note
8:
Intangible Assets
 
On
February 4, 2019,
the Company entered into an agreement under which it repurchased the right to develop franchises in various counties in South Carolina and Georgia. The total consideration for the transaction was
$681,500.
The Company carried a deferred revenue balance associated with these transactions of
$44,334,
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, 2019
    Gross Carrying   Accumulated   Net Carrying
    Amount   Amortization   Value
Intangible assets subject to amortization:                        
Reacquired franchise rights   $
3,237,794
     $
(1,223,225
 )   $
2,014,569
  
Customer relationships    
1,254,375
      
(796,025
 )    
458,350
  
Reacquired development rights    
2,050,482
      
(957,296
 )    
1,093,186
  
    $
6,542,651
     $
(2,976,546
 )   $
3,566,105
  
 
    As of December 31, 2018
    Gross Carrying   Accumulated   Net Carrying
    Amount   Amortization   Value
Intangible assets subject to amortization:                        
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
  
 
Amortization expense related to the Company’s intangible assets was
$336,899
and
$694,290
for the
three
and
nine
months ended
September 30, 2019,
respectively. Amortization expense was
$131,262
and
$375,036
for the
three
and
nine
months ended
September 30, 2018,
respectively.
 
Estimated amortization expense for
2019
and subsequent years is as follows:
 
 
2019 (remainder)
 
$
355,608
 
 
 
2020
 
 
1,405,942
 
 
 
2021
 
 
1,209,621
 
 
 
2022
 
 
537,557
 
 
 
2023
 
 
57,377
 
 
 
Total
 
$
3,566,105