| Goodwill and Intangible Assets - Net |
| 4. |
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. The following is the summary of the changes to the
carrying amount of goodwill for the years ended December 31, 2019 and 2018:
| |
|
Year Ended |
|
|
Year Ended |
|
| |
|
December 31, 2019 |
|
|
December 31, 2018 |
|
| Beginning gross balance |
|
$ |
12,593,795 |
|
|
$ |
12,263,943 |
|
| Acquisitions |
|
|
39,901 |
|
|
|
329,852 |
|
| Ending gross balance |
|
$ |
12,633,696 |
|
|
$ |
12,593,795 |
|
At December 31, 2019, and 2018, approximately
$90,000 of goodwill was allocated to the Practice Management segment and the balance was allocated to the Healthcare IT segment.
Below is a summary of intangible asset activity for the years ended
December 31, 2019 and 2018:
| |
|
Customer |
|
|
Non-Compete |
|
|
Other Intangible |
|
|
|
|
| |
|
Relationships |
|
|
Agreements |
|
|
Assets |
|
|
Total |
|
| COST |
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, January 1, 2019 |
|
$ |
22,741,300 |
|
|
$ |
1,236,377 |
|
|
$ |
1,477,059 |
|
|
$ |
25,454,736 |
|
| Capitalized software costs and other intangible assets |
|
|
- |
|
|
|
- |
|
|
|
591,509 |
|
|
|
591,509 |
|
| Translation loss |
|
|
- |
|
|
|
- |
|
|
|
(41,098 |
) |
|
|
(41,098 |
) |
| Disposals |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Allocation from 2019 acquisition |
|
|
856,000 |
|
|
|
- |
|
|
|
- |
|
|
|
856,000 |
|
| Balance, December 31, 2019 |
|
$ |
23,597,300 |
|
|
$ |
1,236,377 |
|
|
$ |
2,027,470 |
|
|
$ |
26,861,147 |
|
| Useful lives |
|
|
3-12 Years |
|
|
|
3 Years |
|
|
|
3 Years |
|
|
|
|
|
| ACCUMULATED AMORTIZATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, January 1, 2019 |
|
$ |
16,457,878 |
|
|
$ |
1,234,774 |
|
|
$ |
1,128,081 |
|
|
$ |
18,820,733 |
|
| Amortization expense |
|
|
1,855,634 |
|
|
|
1,601 |
|
|
|
205,954 |
|
|
|
2,063,189 |
|
| Balance, December 31, 2019 |
|
|
18,313,512 |
|
|
|
1,236,375 |
|
|
|
1,334,035 |
|
|
|
20,883,922 |
|
| Net book value |
|
$ |
5,283,788 |
|
|
$ |
2 |
|
|
$ |
693,435 |
|
|
$ |
5,977,225 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| COST |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, January 1, 2018 |
|
$ |
16,491,300 |
|
|
$ |
1,236,377 |
|
|
$ |
1,498,417 |
|
|
$ |
19,226,094 |
|
| Capitalized software costs and other intangible assets |
|
|
- |
|
|
|
- |
|
|
|
108,552 |
|
|
|
108,552 |
|
| Translation loss |
|
|
- |
|
|
|
- |
|
|
|
(129,910 |
) |
|
|
(129,910 |
) |
| Allocation from 2018 acquisition |
|
|
6,250,000 |
|
|
|
- |
|
|
|
- |
|
|
|
6,250,000 |
|
| Balance, December 31, 2018 |
|
$ |
22,741,300 |
|
|
$ |
1,236,377 |
|
|
$ |
1,477,059 |
|
|
$ |
25,454,736 |
|
| Useful lives |
|
|
3-12 Years |
|
|
|
3 Years |
|
|
|
3 Years |
|
|
|
|
|
| ACCUMULATED AMORTIZATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, January 1, 2018 |
|
$ |
14,685,190 |
|
|
$ |
1,227,601 |
|
|
$ |
803,759 |
|
|
$ |
16,716,550 |
|
| Amortization expense |
|
|
1,772,688 |
|
|
|
7,173 |
|
|
|
324,322 |
|
|
|
2,104,183 |
|
| Balance, December 31, 2018 |
|
|
16,457,878 |
|
|
|
1,234,774 |
|
|
|
1,128,081 |
|
|
|
18,820,733 |
|
| Net book value |
|
$ |
6,283,422 |
|
|
$ |
1,603 |
|
|
$ |
348,978 |
|
|
$ |
6,634,003 |
|
Other intangible assets primarily represent
software costs. Amortization expense was approximately $2.1 million for both the years ended December 31, 2019 and 2018. The weighted-average
amortization period is seven years.
As of December 31, 2019, future amortization
expense scheduled to be expensed is as follows:
| Year ending |
|
|
|
| December 31 |
|
|
|
| 2020 |
|
$ |
1,437,324 |
|
| 2021 |
|
|
1,292,146 |
|
| 2022 |
|
|
959,225 |
|
| 2023 |
|
|
338,530 |
|
| 2024 |
|
|
300,000 |
|
| Thereafter |
|
|
1,650,000 |
|
| Total |
|
$ |
5,977,225 |
|
|