• Filing Date: 2019-07-15
  • Form Type: 10-Q
  • Description: Quarterly report
v3.19.2
Note 8 - Goodwill and Intangible Assets
3 Months Ended
May 31, 2019
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]
NOTE
8
– GOODWILL AND INTANGIBLE ASSETS
 
Intangible assets at
May 31, 2019
and
February 28, 2019
consist of the following:
 
             
May 31, 2019
   
February 28, 2019
 
   
Amortization
Period (in years)
   
Gross Carrying
Value
   
Accumulated
Amortization
   
Gross Carrying
Value
   
Accumulated
Amortization
 
Intangible assets subject to amortization
                                         
Store design
 
 
10
 
    $
220,778
    $
214,527
    $
220,778
    $
214,152
 
Packaging licenses
 
 3
-
5
     
120,830
     
120,830
     
120,830
     
120,830
 
Packaging design
 
 
10
 
     
430,973
     
430,973
     
430,973
     
430,973
 
Trademark/Non-competition agreements
 
 5
-
20
     
715,339
     
241,989
     
715,339
     
223,628
 
Franchise rights
 
 
20
 
     
5,979,637
     
2,458,525
     
5,979,637
     
2,300,717
 
Total
 
 
 
 
     
7,467,557
     
3,466,844
     
7,467,557
     
3,290,300
 
Intangible assets not subject to amortization
                                         
Franchising segment-
                                         
Company stores goodwill
 
 
 
 
    $
1,099,328
    $
267,020
    $
1,099,328
    $
267,020
 
Franchising goodwill
 
 
 
 
     
295,000
     
197,682
     
295,000
     
197,682
 
Manufacturing segment-goodwill
 
 
 
 
     
295,000
     
197,682
     
295,000
     
197,682
 
Trademark
 
 
 
 
     
20,000
     
-
     
20,000
     
-
 
Total goodwill
 
 
 
 
     
1,709,328
     
662,384
     
1,709,328
     
662,384
 
                                           
Total Intangible Assets
 
 
 
 
    $
9,176,885
    $
4,129,228
    $
9,176,885
    $
3,952,684
 
 
Effective
March 1, 2002,
under Accounting Standards Codification Topic
350,
all goodwill with indefinite lives is
no
longer subject to amortization. Accumulated amortization related to intangible assets
not
subject to amortization is a result of amortization expense related to indefinite life goodwill incurred prior to
March 1, 2002.
 
Amortization expense related to intangible assets totaled
$176,544
and
$211,287
during the
three
months ended
May 31, 2019
and
2018,
respectively.
 
During the year ended
February 28, 2019,
the Company reviewed its estimates of the future economic life of certain intangible assets. As a result of this review, the Company accelerated the rate of amortization of certain intangible assets to better reflect their expected future value. Consistent with the treatment of a change in estimate, the new rate of amortization of intangible assets will be applied to future periods.
 
At
May 31, 2019,
annual amortization of intangible assets, based upon the Company’s existing intangible assets and current useful lives, is estimated to be the following:
 
FYE 20
  $
529,632
 
FYE 21
   
594,229
 
FYE 22
   
490,060
 
FYE 23
   
411,607
 
FYE 24
   
345,642
 
Thereafter
   
1,629,543
 
Total
  $
4,000,713