NOTE

– GOODWILL AND INTANGIBLE ASSETS

Intangible assets consist of the following:

				August 31, 2020				February 29, 2020
	Amortization Period (in years)			Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Intangible assets subject to amortization
Store design		10		$	394,826	$	216,403	$	295,779	$	215,653
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		556,339		323,722		715,339		297,072
Franchise rights		20			5,979,637		3,195,910		5,979,637		2,931,949
Total				$	7,482,605	$	4,287,838	$	7,542,558	$	3,996,477
Intangible assets not subject to amortization
Franchising segment-
Company stores goodwill				$	515,065			$	832,308
Franchising goodwill					97,318				97,318
Manufacturing segment-goodwill					97,318				97,318
Trademark					20,000				20,000
Total goodwill					729,701				1,046,944

Total Intangible Assets				$	8,212,306	$	4,287,838	$	8,589,502	$	3,996,477

Amortization expense related to intangible assets totaled

$142,804

and

$291,361

during the

three

and

six

months ended

August 31, 2020

compared to

$176,544

and

$353,088

during the

three

and

six

months ended

August 31, 2019,

respectively.

August 31, 2020,

annual amortization of intangible assets, based upon the Company's existing intangible assets and current useful lives, is estimated to be the following:

2021		274,705
2022		466,554
2023		391,988
2024		329,267
2025		277,022
Thereafter		1,281,184
Total	$	3,020,720

During FY

2020,

the Company initiated a store design project. The initiative is expected to add approximately

$250,000

of intangible assets, of which,

$174,000

was recorded as of

August 31, 2020.

This amount will be subject to amortization upon conclusion of the project.