CareCloud, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Intangible Assets - Net

Goodwill and Intangible Assets - Net

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

5. GOODWILL AND Intangible Assets – NET

The following is the summary of the changes to the carrying amount of goodwill for the years ended December 31, 2016 and 2015:

	December 31, 2016		December 31, 2015
Beginning gross balance	$	8,971,994	$	8,560,336
Acquisitions		3,206,874		411,658
Ending gross balance	$	12,178,868	$	8,971,994

Below is a summary of intangible asset activity for the years ended December 31, 2016 and 2015:

	Customer		Non-Compete		Other Intangible
	Relationships		Agreements		Assets		Total
COST
Balance, January 1, 2016	$	12,166,546	$	1,206,272	$	488,082	$	13,860,900
Purchase of other intangible assets		-		-		200,404		200,404
Allocation from 2016 Acquisitions		4,204,829		30,105		600,853		4,835,787
Balance, December 31, 2016	$	16,371,375	$	1,236,377	$	1,289,339	$	18,897,091
Useful lives		3 Years		3 Years		3 Years
ACCUMULATED AMORTIZATION
Balance, January 1, 2016	$	7,351,532	$	835,771	$	294,193	$	8,481,496
Amortization expense		4,146,023		270,935		164,931		4,581,889
Balance, December 31, 2016		11,497,555		1,106,706		459,124		13,063,385
Net book value	$	4,873,820	$	129,671	$	830,215	$	5,833,706

COST
Balance, January 1, 2015	$	11,164,988	$	1,206,272	$	309,486	$	12,680,746
Purchase of other intangible assets		-		-		97,596		97,596
Acquisition of specific customer relationships		494,358		-		-		494,358
Allocation from 2015 Acquisitions		507,200		-		81,000		588,200
Balance, December 31, 2015	$	12,166,546	$	1,206,272	$	488,082	$	13,860,900
Useful lives		3 Years		3 Years		3 Years
ACCUMULATED AMORTIZATION
Balance, January 1, 2015	$	3,754,244	$	313,647	$	235,018	$	4,302,909
Amortization expense		3,597,288		522,124		59,175		4,178,587
Balance, December 31, 2015		7,351,532		835,771		294,193		8,481,496
Net book value	$	4,815,014	$	370,501	$	193,889	$	5,379,404

Other intangible assets primarily represent the purchase of software. Amortization expense was approximately $4.6 million and $4.2 million for the years ended December 31, 2016 and 2015, respectively. The weighted-average amortization period is three years.

As of December 31, 2016, future amortization expense scheduled to be expensed is as follows:

Years ending December 31
2017	$	3,624,944
2018		1,476,398
2019		732,364
Total	$	5,833,706

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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