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

Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Intangible Assets

Note 5 - Intangible Assets

3 Months Ended

Mar. 31, 2016

Intangible Assets Disclosure [Text Block]

Note 5: Intangible Assets

On January 1, 2016, the Company entered into an agreement under which it repurchased the regional development rights to develop franchises in San Bernardino and Riverside Counties in California. The total consideration for the transaction was $275,000, paid in cash.

The Company carried a deferred revenue balance associated with these transactions of $36,250, representing license fees collected upon the execution of the regional developer agreements. The Company accounted for the development rights associated with the unsold or undeveloped franchises as a cancellation, and the respective deferred revenue was netted against the aggregate purchase price or recognized as revenue to the extent deferred revenue was in excess of the cash consideration paid.

Intangible assets consist of the following:

	As of March 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized intangible assets:
Reacquired franchise rights	$	1,539,667	$	237,050	$	1,302,617
Customer relationships		555,512		259,939		295,573
Reacquired development rights		1,162,000		152,848		1,009,152
	$	3,257,179	$	649,837	$	2,607,342

Unamortized intangible assets:
Goodwill						2,466,937
Total intangible assets					$	5,074,279

Amortization expense was $173,677 and $36,667 for the three months ended March 31, 2016 and 2015, respectively.

Estimated amortization expense for 2016 and subsequent years is as follows:

2016 (remaining)	$	521,027
2017		504,203
2018		385,113
2019		385,113
2020		385,113
Thereafter		426,773
Total	$	2,607,342