Annual report pursuant to Section 13 and 15(d)

GOODWILL AND INTANGIBLE ASSETS ??? NET

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GOODWILL AND INTANGIBLE ASSETS – NET
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
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, 2021 and 2020:

 

             
    Year ended December 31,  
    2021     2020  
    ($ in thousands)  
Beginning gross balance   $ 49,291     $ 12,634  
Acquisitions, net of adjustments     11,895       36,657  
Ending gross balance   $ 61,186     $ 49,291  

 

At December 31, 2021, and 2020, 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, 2021 and 2020:

 

    Customer     Capitalized     Other Intangible        
    Relationships     Software     Assets     Total  
  ($ in thousands)  
COST                                
Balance, January 1, 2021   $ 44,497     $ 5,760     $ 9,142     $ 59,399  
Capitalized software costs     -       7,636       -       7,636  
Other intangible assets     -       -       -       -  
Translation loss     -       (200 )     -       (200 )
Allocation from 2021 acquisitions     3,100       -       490       3,590  
Balance, December 31, 2021   $ 47,597     $ 13,196     $ 9,632     $ 70,425  
Useful lives     3-12 years       3 years       3 years          
ACCUMULATED AMORTIZATION                                
Balance, January 1, 2021   $ 26,008     $ 245     $ 3,168     $ 29,421  
Amortization expense     7,843       1,346       1,037       10,226  
Balance, December 31, 2021     33,851       1,591       4,205       39,647  
Net book value   $ 13,746     $ 11,605     $ 5,427     $ 30,778  
                                 
COST                                
Balance, January 1, 2020   $ 23,597     $ 600     $ 2,664     $ 26,861  
Capitalized software costs     -       5,163       4,800       9,963  
Other intangible assets     -       -       1,700       1,700  
Translation loss     -       (3 )     (22 )     (25 )
Allocation from 2020 acquisitions     20,900       -       -       20,900  
Balance, December 31, 2020   $ 44,497     $ 5,760     $ 9,142     $ 59,399  
Useful lives     3-12 years       3 years       3 years          
ACCUMULATED AMORTIZATION                                
Balance, January 1, 2020   $ 18,314     $ 6     $ 2,564     $ 20,884  
Amortization expense     7,694       239       604       8,537  
Balance, December 31, 2020     26,008       245       3,168       29,421  
Net book value   $ 18,489     $ 5,515     $ 5,974     $ 29,978  

 

Other intangible assets primarily represent software costs. Amortization expense was approximately $10.3 million and $8.6 million for the years ended December 31, 2021 and 2020, respectively. The weighted-average amortization period is three years.

 

 

As of December 31, 2021, future amortization expense scheduled to be expensed is as follows:

 

Years ending      
December 31,   ($ in thousands)  
2022   $ 13,068  
2023     10,024  
2024     6,034  
2025     300  
2026     300  
Thereafter     1,052  
Total   $ 30,778