Quarterly report pursuant to Section 13 or 15(d)

ACQUISITIONS

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ACQUISITIONS
 6 Months Ended
Jun. 30, 2014
Business Combinations [Abstract]  
Business Combination Disclosure [Text Block]
3.
ACQUISITIONS
 
Effective at the close of business on June 30, 2013, the Company executed an Asset Purchase Agreement (the “Agreement”) to acquire Metro Medical Management Services, Inc. (“Metro Medical”). Metro Medical is a New York-based company that offers full-scale revenue cycle management services to small-to-medium sized healthcare practices. Metro Medical broadened the Company’s presence in the healthcare information technology industry through geographic expansion of its customer base and by increasing available marketing resources and specialized trained staff. Under the terms of the Agreement, the Company paid cash consideration of $275,000 at closing and issued a promissory note to Metro Medical for $1,225,000. The principal amount of the promissory note is payable in monthly installments over a twenty-four month period from September 2013, and bears interest at the rate of 5% per year.
 
Cash paid on date of acquisition
 
$
275,000
 
Promissory note payable to Metro Medical
 
 
1,225,000
 
Total purchase consideration
 
$
1,500,000
 
 
Under purchase price accounting, we recognize the assets and liabilities acquired at their fair value on the acquisition date, with any excess in purchase price over these values being allocated to goodwill.
 
We engaged a third-party valuation specialist to assist the Company in valuing the assets from our acquisition of Metro Medical. The results of the valuation are presented as below:
 
Customer contracts and relationships
 
$
904,000
 
Non-compete agreement
 
 
252,000
 
Goodwill
 
 
344,000
 
 
 
$
1,500,000
 
 
The pro forma information below represents condensed consolidated results of operations as if the acquisition of Metro Medical occurred on January 1, 2013. The pro forma information has been included for comparative purposes and is not indicative of results of operations of the Company had the acquisitions occurred at January 1, 2013, nor is it necessarily indicative of future results.
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30, 2013
 
June 30, 2013
 
Total revenue
 
$
3,089,057
 
$
6,074,147
 
Net (loss)
 
$
(363,931)
 
$
(549,016)
 
  
The revenue from former customers of Metro Medical whose contracts were acquired has been included in the Company’s statement of operations for each reporting period since the date of acquisition. Revenues of approximately $577,911 and $1,202,689 related to Metro Medical are included in the condensed consolidated statements of operations for the three months and six months ended June 30, 2014, respectively.