3. GOODWILL AND INTANGIBLE ASSETS – NET

Goodwill consists of the excess of the purchase price over the fair value of identifiable net assets of businesses acquired. At December 31, 2023, and 2022, approximately $90,000 of goodwill was allocated to the Medical Practice Management segment and the balance was allocated to the Healthcare IT segment. The following is the summary of the changes to the carrying amount of goodwill for the years ended December 31, 2023 and 2022:

 SCHEDULE OF CHANGES TO THE CARRYING AMOUNT OF GOODWILL 

As a result of a triggering event in December 2023 resulting from the suspension of the Preferred Stock dividend, the Company updated its annual goodwill impairment test that was performed as of October 31, 2023 for the Healthcare IT segment. It was determined that the fair value of the Healthcare IT reporting unit was less than the carrying value at both October 31 and as a result of the triggering event. Accordingly, impairment charges of approximately $2.0 million and $40.0 million, respectively, were recorded.

Below is a summary of intangible asset activity for the years ended December 31, 2023 and 2022:

 SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS  

As a result of a triggering event in December 2023, we also reviewed our other long term assets for impairment. We determined that the fair value of these assets exceeded their carrying value and that there was no impairment.

The amount for capitalized software represents payroll and development costs incurred for internally developed software. Other intangible assets primarily represent non-compete agreements, purchased and acquired software and trademarks. Amortization expense was approximately $12.4 million and $9.8 million for the years ended December 31, 2023 and 2022, respectively. The weighted-average amortization period is three years.

As of December 31, 2023, future amortization expense scheduled to be expensed is as follows:

SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE