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 September 30, 2024 and December 31, 2023, approximately $90,000 of goodwill was allocated to the Medical Practice Management segment and the balance was allocated to the Healthcare IT segment.

The Company tests goodwill for impairment at the reporting unit level annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists. As a result of a triggering event in December 2023 resulting from the decreased equity market value following 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 of the date of the triggering event. Accordingly, impairment charges of approximately $42.0 million were recorded during the fourth quarter of 2023. The conclusion was based upon the value determined using the discounted cash flow method as supported by the guideline company transaction method and the guideline public company method. During the nine months ended September 30, 2024, the Company determined that there was no further impact on the valuation of goodwill.

The following is the summary of the carrying amount of goodwill for the nine months ended September 30, 2024 and the year ended December 31, 2023:

 SCHEDULE OF CHANGES TO THE CARRYING AMOUNT OF GOODWILL

Intangible assets – net as of September 30, 2024 and December 31, 2023 consist of the following:

 SCHEDULE OF INTANGIBLE ASSETS

Capitalized software represents payroll and development costs incurred for internally developed software. Other intangible assets primarily represent purchased intangibles. Amortization expense for the three months ended September 30, 2024 and 2023, was approximately $2.7 million and $3.4 million, respectively, and for the nine months ended September 30, 2024 and 2023, was approximately $9.4 million and $8.8 million, respectively. The weighted-average amortization period is approximately two years.

As of September 30, 2024, future amortization is scheduled to be expensed as follows:

 SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE