INTANGIBLE ASSETS AND PURCHASE LIABILITY

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Note 3 - INTANGIBLE ASSETS AND PURCHASE LIABILITY

Intangible assets as of December 31, 2018 and December 31, 2017, consist of the following:

	December 31,
	2018			2017
Intangible assets	$	302,737		$	350,000
Accumulated amortization		(69,308	)		(29,167	)
Intangible assets, net	$	233,429		$	320,833

Asset Acquisition - Set.fm

On October 16, 2017, the Company entered into an agreement with PledgeMusic, Inc. (the “Seller”), whereby the Company acquired the digital live music distribution platform “Set.fm” from PledgeMusic. Additionally, the Company will offer PledgeMusic North America’s full suite of music business tools allowing artists to sell music, merchandise and live experiences directly to fans, enhancing the Company’s clients’ revenue opportunities on a shared revenue basis. Set.fm is a do-it-yourself (DIY) platform that makes it easy for artists to record and sell their live shows directly to fans’ mobile devices, uploading simultaneously with their performance. The platform, which also features an innovative and easy-to-use studio app, already boasts thousands of artists and tens of thousands of fans using it. VNUE plans to update and improve the existing platform for indie artists and their fans, and to implement pro features for artists that VNUE and its affiliate DiscLive produce. The Company determined that the acquisition of Set.fm constituted the acquisition of an asset for accounting purposes.

The purchase price for the acquisition was comprised of $50,000 paid in cash, and a purchase liability of $300,000, for an aggregate purchase price of $350,000. The purchase liability is payable on the net revenues derived from VNUE’s live recording and content business and must be paid in full to the Seller no later than the three (3) year anniversary of the date of the agreement, or October 16, 2020. If the Company fails to pay the Seller the purchase liability on time, the Seller may request at any time within one hundred eighty days (180) days following the (3) year anniversary of the asset purchase agreement, that the Company immediately forfeit, convey, assign and transfer to the Seller all or any of the Purchased Assets so requested by the Seller for no additional consideration. For the year ended December 31, 2017, there was no net revenue derived from the acquired assets and accordingly, no payments were made on the earnout.

The Company assigned $350,000 of the purchase price to intellectual property which will be amortized over a three (3) year period. Total amortization expense during the twelve months ended December 31, 2018 and 2017, was $116,668 and $29,167, respectively, which is included in general and administrative expense in the Consolidated Statements of Operations. In December 2018, the Company reviewed this intangible asset for impairment and based on our findings, recorded an impairment charge of $204,165, leaving no intangible asset balance remaining at December 31, 2018.

Asset Acquisition - Soundstr

On April 23, 2018, the Company entered into an agreement with MusicPlay Analytics, LLC (d/b/a Soundstr) (“Soundstr”) whereby the Company acquired the assets of Soundstr, a technology that aims to help businesses pay fairer music license fees based on actual music usage. The Company purchased the assets of Soundstr by agreeing to issue 2,275,000 shares of the Company’s common stock, valued at $68,250, based on the closing market price of the Company’s stock on the date of the agreement, and the Company agreed to assume and pay $234,487 of identified Soundstr obligations within 60 days of April 23, 2018. The outstanding balance of the assumed Soundstr obligations was $193,909 as of December 31, 2018.

The Company assigned the aggregate purchase price of $302,737 to intellectual property which will be amortized over a three (3) year period. Total amortization expense during the year ended December 31, 2018, was $69,308, which is included in general and administrative expense in the Consolidated Statements of Operations.

Total estimated future amortization expense with respect to intangible assets is as follows:

Years Ending December 31,	Amount
2019	$	100,912
2020		100,912
2021		31,605
Total	$	233,429